:ade Policy 
 Imperial Federation 
 
 M.H.HBKYE
 
 THE LIBRARY 
 OF 
 
 THE UNIVERSITY 
 
 OF CALIFORNIA 
 
 LOS ANCELES
 
 THE TRADE POLICY 
 
 IMPERIAL FEDERATION 
 
 FROM AN ECONOMIC POINT OF VIEW 
 
 MAURICE H. HERV EY^ 
 
 Principal of Illazvarra College, New Sozith Wales ; Author of 
 
 "Outlines of Political Econotny,''' the "Genesis of Federation,^' the 
 
 '' Latest Pkase of Imperial Federation," fir'f. , &'c. 
 
 LONDON 
 
 SWAN SONNENSCHEIN & CO. 
 
 NEW YORK: CHARLES SCRIBNER'S SONS 
 
 1892
 
 XLo 
 
 THE COUNCIL AND MEMBERS 
 
 OF THK IMPERIAL FEDERATION LEAGUE, 
 
 THIS EFFORT IN THE CAUSE OF BRITANNIC UNITY 
 
 IS DEDICATED.
 
 
 THE 
 
 TRADE POLICY OF FEDERATION. 
 
 AUTHOR'S NOTE. 
 
 PC England's Commercial Policy differs so radically from that, 
 ;n not alone of alien nations, but of the component States of 
 her own Empire, that a change, either in her Policy or in 
 theirs, is sooner or later inevitable. Advocates of Protec- 
 tion are just as enthusiastic as advocates of Free Trade ; 
 ^ and neither party can see aught of good in the rival system. 
 ^ Others, again, find the solution in Keciprocity or Fair 
 4« Trade. Now, like most questions in Social Science, Com- 
 ^ mercial Policy is somewhat intricate ; nor is it possible to 
 g[ deal with it intelligently upon other than strictly economic 
 grounds. In the following pages the writer has (in the 
 form of a College Lecture) endeavoured to test the rival 
 systems upon such grounds, and as impartially as possible. 
 With some of the conclusions arrived at, it is possible that 
 ^ the reader will not agree ; but it is hoped that he will, at 
 ci least, be assisted to arrive at conclusions of his own based 
 3^ upon more solid considerations than mere partisan feeling. 
 
 M. H. H. 
 
 ai) 1.868
 
 THE TRADE POLICY OF FEDERATION. 
 
 I 
 
 SYNOPSIS OF CONTENTS. 
 PART I.— The Trade Policy of Federation. 
 
 Errors of Economists. — Synthesis v. Analysis. — Essential De- 
 finitions. — The Elements of Production. — Malthus on Popu- 
 lation. — Poverty. — Free Trade Economically Contrasted 
 with Protection. — Radical Unsoundness of Prf)tection.— 
 Expediency its only Justification. — Great Britain Produc- 
 tively Compared with tlie United States. — Why Great 
 Britain adopted Free Trade. — Why the United States 
 adopted Pi'otection. — Which Example should the Colonies 
 follow ? — Considerations upon which their Choice should be 
 Based. — The Penalties of Protection. — Seven chief Factors 
 of National Wealth. — The Question as to how these are 
 affected by the rival Systems exhaustively analysed. — Con- 
 ditions of future National Polity under which the Colonies 
 might advanta;^eously adhere to Protection. — The Alter- 
 native Course. — Britannic Confederation.- — Existing Difier- 
 ences of Trade Policy the chief Obstacle thereto. — The 
 essential Bases of Confederation. 
 
 The Appendix Notes. 
 
 Fair Trade.— Its Inconsistencies. — Its possible Expediency 
 upon a large Scale, and with wliat Object. 
 
 Henry George on Free Trade. — A Field for a Hobby-Horse. 
 — The Persistency of Protection well illustrated. — Ex- 
 pediency ignored. 
 
 Foreign Trade. — Statistics. — Foreign Trade a subsidiary Item 
 under Protection. — American compared with Colonial Trades. 
 
 Manufactures. — Protective Fallacies. — Protective Monopolies 
 of Distributif)n and Profits. — The Tax upon Consumers. — 
 A Bull-Frog Cohmy. 
 
 Exchange and Currency. — Exchange defined.- — The "Balance 
 of Trade Bugbear." — Exchange tends to Equilibrium.— 
 Examples. — Unreliability of Statistics in Exchange Ques- 
 tions. — -Real Tests. — Paper Currency. 
 
 PART II. — The Trade Economy of Federation. 
 CoBDENiTE Errors. — Unfulfilled Expectations. — Why Foreign 
 Nations are Protectionist. — Expediency. — Protectionist 
 Powers of Endurance. — Reasons. — Why Protection is in-
 
 X Synopsis of Contents. 
 
 creasing. — Necessity therefore. — How Great Britain has 
 hitherto evaded Protective Tariffs. — The Sop to Cerberus. 
 — Foreign Trade. — Treaties. — Their Injustice towards the 
 Colonies. — Effects upon British Trade of the Abolition of 
 these Treaties. — The only future Outlet for British Trade. 
 — Britannic Commercial Union. — Should such Commercial 
 Unions be rigidly confined to Communities owing Allegiance 
 to the British Ci'own ? — Proposals for a Britannic Com- 
 mercial Alliance. — Its Advantages. — Terms upon which 
 Foreign Nations should be admissible.— Estimate of Nations 
 likely to join such Alliance. — British Trade then and now. 
 — Two- thirds of a Loaf better than no Bread. — Prospects 
 of increased Trade. 
 
 Basis upon which a Britannic Commercial Union might 
 be formed. — Objections to Free Trade within the Union 
 with Reciprocity towards alien States. — Why the Colonies 
 are Protectionist. — A Compromise essential. 
 
 Suggestions for a Basis. — Distinction between staple and 
 secondary Imports. — Great Britain's best Customers. — Her 
 Food Supply analysed. — The "Cheap Loaf."- — A cheaper 
 Loaf a near Possibility. — The Sugar-Bounties' Monstrosity. 
 — Other Foreign Bounties. — The Remedy. — Prospective 
 Trade under C'^inmercial U^nion. — Backward Dejjendencies. 
 — The CausJ^, — Estimate of British Trade Twelve Months 
 after Establishment of Union. 
 
 Would the Tendency of such a Commercial Union be 
 towards Free Trade or Protection 1 — The Question ex- 
 amined. — Duration of Protective Tarifls. — The Eight 
 Hours' Question. — Its Influence upon Colonial Trade 
 Policy. — Sketches of Colonial Labour. — Life.— Immigrants. 
 Financial Effects of a Commercial Union. — The Security 
 now afforded to Investors. — Why Canadian Stocks are pre- 
 ferred to Australian. — Deductions. — Foreign Investments. 
 
 Foreign Nations and the Britannic Conunercial Union. — 
 Inevitaljle Consequences upon their Trade. — Great Britain's 
 own Future her paramount Consideration. — The Peace of 
 the World. 
 
 Steps towards a Britannic Commercial Union. — Essential 
 Preliminaries. — Efforts already made. — The United Empire 
 Trade League. — Lord Salisbury's Opinion. — Congresses of 
 Chambers of Commerce. — Necessity for an Awakening of 
 Public Opinion. — Conclusion.
 
 PART I. 
 THE 
 
 TRADE POLICY OF FEDERATION.
 
 PROTECTION, FREE TRADE, AND FAIR 
 TRADE. 
 
 BY common consent of mankind, the problems 
 of Political Economy have come to be re- 
 garded as quite beyond the grasp of ordinary minds ; 
 they have been abandoned to the investigations of 
 learned professors who make the " dismal science " 
 their especial province, and the public has impatiently 
 waited for enlightenment. Now, herein, the public 
 intelligence has underrated its own powers, and has 
 overrated the powers of the professors. Philosophy 
 has been trying, for at least a hundred years, to arrive 
 at definite conclusions, and has failed signally. It has 
 steadily adhered to the synthetic instead of to the 
 analytical process of reasoning ; it has deposed Bacon, 
 and replaced Aristotle ; it has attempted to deduce 
 fact from theory, instead of deducing theory from 
 fact. As the inevitable results, there have been as 
 many different theories as philosophers, who have 
 persistently wasted their energies in upholding their 
 own, or in refuting rival, hypotheses. Each school, 
 convinced of the perfection of its own system, has an-
 
 4 The Trade Policy of Federation. 
 
 nounced itself prepared to instruct mankind how that 
 perfection may be attained. Mankind, seeing this 
 disagreement among the doctors, has refused to be in- 
 structed, preferring to be guided by such glimmerings 
 of truth as experience seems to furnish, or by such 
 notions of expediency as each community individually 
 deems adaptable to itself Hundred-voiced dogmatic 
 Economy bewails this perverseness, loudly proclaiming 
 that it has established a science upon a basis as firm 
 as the law of gravitation, and quite overlooking the 
 fact that whereas gravitation is a law, acknowledged 
 by all astronomers, which has, in thousands of 
 marvellous ways, proved its truth, the teachings of 
 Political Economy arr based (fortunately with a few 
 exceptions) upon vj^eories which, so far from being 
 acknowledged by all Economists, are still the subjects 
 of the fiercest contention, and which, so far from ap- 
 proving their truth in thousands of marvellous ways, 
 need to be bolstered up by thousands of marvellous 
 excuses to account for their practical shortcomings. 
 The bald fact is that the strong modern tendency to 
 reduce all science to hard-and-fast rules has attempted 
 to include a subject which is not a science at all. 
 Science, in its technical sense, means knowledge of the 
 laws of Cause and Effect — not theory. Strip Political 
 Economy of the thousand and one theories upon 
 which it is built, and what remains of proven fact ?
 
 The Trade Policy of Federation. 5 
 
 Not much truly; but that h'ttlc represents all our 
 knowledge upon the subject. Outside that knowledge 
 it is pure waste of time to wander ; upon that 
 knowledge alone are we justified in shaping our course. 
 A common-sense distinction must therefore be laid 
 down between theory and fact upon the very threshold 
 of any inquiry within the domains of this most un- 
 scientific of all so-called sciences, whereby much use- 
 less discussion will be avoided, the grain sifted from 
 the chaff, and such (unfortunately not very numerous) 
 discoveries as have been made focussed into an intel- 
 ligible narrative. 
 
 Theory is an assumption of knowledge of the 
 causes which produce known results. To be of any 
 use it must not alone explain the causes of known 
 results in the past, but must be able to predict the 
 future results of (assumedly) known causes. It must in 
 fact be prospective as well as retrospective. When it 
 fulfils these conditions it becomes a fact. If it does 
 not fulfil these conditions, it remains useless — nay, 
 worse than useless, for it chains men's minds to argu- 
 ment instead of inquiry. 
 
 Fact is proven, incontrovertible Law of Cause and 
 Effect based either upon perfected theory or upon 
 obvious consequence of action. 
 
 Thus, when Ptolemy assumed that sun, moon, and 
 stars revolve round the earth, and, upon this crude
 
 6 The Trade Policy of Federation. 
 
 hypothesis, founded ! his system of astronomy, he 
 broached a theory which held its ground for ages, 
 which accounted (after a fashion) for certain apparent 
 natural phenomena, but which could lay no claims to 
 scientific accuracy. When Copernicus assumed the 
 totally opposite hypothesis that the sun is the central 
 star round which all the planets revolve, he too merely 
 broached a theory, — a theory indeed founded upon more 
 intelligent observation than that of Ptolemy, but after 
 all only a theory — liable at any time to be replaced 
 by some other hypothesis. But when Newton brought 
 his giant-intellect to bear upon the rival assumptions 
 and enunciated his " Law of Gravitation," the matter 
 was for ever set at rest : the truth of the Copernican 
 system proved bej'O^nd doubt, the absurdity of 
 Ptolemy's suppositions clearly demonstrated. New- 
 ton's great law never was a theory ; it established its 
 truth at once, and that truth has ever since been con- 
 fimed by that most convincing of all tests — fulfilled 
 prediction. Newton, indeed, converted Copertiiciis' 
 theory into fact, and established upon a firm basis the 
 most accurate of all sciences, astronomy. 
 
 Now, unfortunately, no giant intellect has arisen to 
 do for Political Economy what Newton did for as- 
 tronomy. The names of Adam Smith and of Stuart 
 Mill are indeed as shining lights to their disciples; 
 but the writings of even these prophets contain a ton
 
 The Trade Policy of Federation. 7 
 
 of theory to an ounce of fact. The greatest discovery 
 hitherto made came from an obscure parson named 
 Malthus, and he did his best to conceal the real value 
 of his wonderful "Law of Population" by plastering it 
 over with silly hypotheses. There would appear to 
 be some irresistible attraction for Economists gener- 
 ally to wander off into abstract speculations. And 
 yet there seems to be no valid reason why anyone, 
 not an Economist, should not be able to form toler- 
 ably clear ideas uj^on any given branch of the subject 
 without straying off into the foggy regions of theory. 
 Elementary ideas they necessarily must be, from the 
 very small amount of available information. But in- 
 asmuch as the subject of Trade (the special field for 
 inquiry in this essay) is essentially elementary too, 
 we may entertain reasonable hopes of arriving at a 
 {q.\m important conclusions based upon something 
 more satisfactory than hypothesis. 
 
 There is a venerable story, current in Bar messes, 
 concerning a well-known legal luminary who, when 
 asked his opinion upon a very open case, replied : 
 " I'd take a hundred guineas and argue it either 
 way." Now, if it be easy for a speaker to argue 
 an open question either pro or con, it is very much 
 easier for a writer to do so. He has merely to fol- 
 low the lazy example of the times : procure some 
 well-known work written in favour of the side he
 
 8 The Trade Policy of Federation. 
 
 means to attack, and some other standard work upon 
 his own side ; this provision gives him a cut-and-dried 
 plan to work upon. By a judicious admixture in his 
 own composition, of criticism of the one, echo of the 
 other, occasional original interjections about national 
 prosperity, waves of depression, and other safe am- 
 biguities, copious statistical lists, etc., he can, if he be 
 a ready writer, rattle off " copy " to any required ex- 
 tent, and take definite rank in the dismal army. The 
 objection to this simple plan is that it never leads to 
 any result. The new work, in its turn, becomes the 
 groundwork for some other writer to operate upon. 
 Criticisms are re-criticised, echoes are re-echoed, fresh 
 and more high-sounding ambiguities are introduced, 
 and more recent sta<"'<^'cics are copied out. Thus the 
 game goes on in a circle. No one is convinced. No 
 one, except (possibly) the authors and their publish- 
 ers, derives any benefit. The scheme of this lecture, 
 whatever may be its defects in execution, is, at least, 
 laid upon different lines. I hold that no individual 
 mind should assume to dogmatise upon a question of 
 national polity which it is within the province of the 
 national legislature alone to decide. The cause 
 neither of Free Trade nor of Protection will ever be 
 won by vociferous denunciation, by authoritative as- 
 sertion, or by wearisome reiteration of stock argu- 
 ments. The legitimate object of inquiry is to in-
 
 The Trade Policy of Federation. g 
 
 quire, not to preach ; to place clearly before the 
 community the full meaning of the alternatives 
 between which that community has to choose, not to 
 dictate the choice. 
 
 Now, if the question could be decided by the 
 standard of right and wrong, Free Trade would at 
 once emerge triumphant. AM restraint placed upon 
 naturally-legitimate freedom of action is very obvi- 
 ously an infringement of natural right. Protection 
 is such a restraint, and therefore naturally wrong. 
 But so also are Customs-duties, so also are hundreds 
 of regulations tolerated in all civilised communities. 
 Natural right and civilisation cannot exist side by 
 side. The only standard recognised by civilised man 
 is expediency ; and it is by this standard that natur- 
 ally-right Free Trade and naturally-wrong Protection 
 must be judged. This makes a wonderful difference. 
 Protection, which before had not a leg to stand on, 
 can now show a very good leg indeed. It now be- 
 comes necessary to decide, imder zvliai conditions (if 
 any) may radically-zvrong Protection be advantageously 
 substituted for radically-right Free Trade f This 
 sounds very paradoxical ; but it is the main issue. 
 Ben Jonson laughed at Shakespeare for writing — 
 
 " Know, Caesar doth no wrong but with just cause ! " 
 And Shakespeare, yielding to the criticism, altered
 
 lo The Trade Policy of Federation. 
 
 the line. He might have allowed the seeming para- 
 dox to stand. Sinnnunii Jus, siiviina injuria. 
 
 Unsatisfactory as I hold the system followed by the 
 theorists to be, I very willingly concede the con- 
 venience of employing the terms used by them ; with 
 this important limitation, however, that clear, definite, 
 consistent meanings be attached to these terms. 
 Economic philosophers fight like cats over the words 
 used in a definition, each one striving to mould it in 
 exact accordance with his particular hobby ; whole 
 chapters are devoted to this word-torturing. One 
 great prophet, Ricardo, made the startling discovery 
 that unused land is unprofitable or, as he put it, 
 triumphantly, at the end of a voluminous treatise, 
 " land newly brough*" Sito cultivation pays no rent for 
 the first year," and insisted on embodying his inspira- 
 tion in any accepted definition of rent. This pro- 
 position threw the Economic philosophers into a 
 frenzy of excitement seventy years ago, and is still 
 awaiting final judgment. Rent fortunately is outside 
 our present limits ; but a great many other equally 
 unsettled terms are not, and must forthwith be stated 
 in the language of common-sense. 
 
 Production : the conversion of a valueless sub- 
 stance into a valuable commodity ; or of potential, 
 into actual, value.
 
 The Trade Policy of Federation. 1 1 
 
 Capital : the saved surplus of past, and one of the 
 essentials to future production ; the portion of wealth 
 devoted to production. 
 
 Profits : the additional value of, or increment to, 
 capital after production. 
 
 Wages : the present wealth of labour ; the share 
 of labour in profits of production discounted by- 
 capital. 
 
 Wealth : (actual) the whole amount possessed of 
 the results of production ; (potential) the undeveloped 
 sources of production. 
 
 Poverty : the manifestation of the inadequacy of 
 wages to support those dependent upon labour. 
 
 Distribution : the direction of the agencies of 
 production, or of the results of production, into the 
 most profitable channels. 
 
 Trade : the exchange of valuable commodities for 
 other valuable commodities or the equivalent. 
 
 Free Trade : unrestricted international Trade. 
 
 Fair Trade : proposal to conduct commercial 
 dealings upon principles of reciprocity. 
 
 Protection : restricted international Trade. 
 
 Distribution of Land : devoting land to that 
 particular branch of production for which it is by 
 nature best suited. 
 
 Distribution of Labour : equivalent to what is 
 generally termed " division of labour ; " that is con-
 
 1 2 The Trade Policy of Federation. 
 
 tinuously employing the same labour upon the same 
 branch of production. 
 
 Distribution of Capital : judicious investment 
 of capital in the most profitable branches of pro- 
 duction. 
 
 Exchange : technical Trade term including all 
 means adopted of obviating necessity for transmitting 
 specie. 
 
 Currency : ordinary coinage, etc., in local cir- 
 culation. 
 
 There are three essential elements to production : 
 land, labour, and capital. This is merely briefly 
 expressing the obvious facts that all produce comes 
 directly or indirectly S'om the land, that labour is 
 necessary to obtain this produce, and that capital is 
 required to assist labour in its task. These elements 
 may with great exactness be likened to three horses 
 of different degrees of speed harnessed to the chariot 
 of production. The pace at which this chariot can 
 travel will also be the pace of the slowest horse in 
 the team. This is Land, which can only be induced 
 by the most strenuous efforts of the other two to 
 quicken his naturally slow gait ; lie is the only check 
 (but a very effectual one) upon their otherwise incal- 
 culable speed. Capital is a quiet animal enough (by 
 Foresight, out of Thrift), willing and able to keep up
 
 The Trade Policy of Federation. 1 3 
 
 with Labour if only Land would let him. Labour is a 
 wilful, headstrong racer (by Devil-may-care, out of 
 Improvidence), continually injuring himself by his 
 wild struggles to forge ahead. In all seriousness, the 
 limited capabilities of land, both from its absolutely 
 unalterable extent and its slow capacity for improve- 
 ment, are at the bottom of all human race troubles. 
 And although the amount of available land is 
 eternally fixed, yet but a small fraction of it is actually 
 turned to the best advantage ; nay, the productivity 
 of even that small fraction may, by practical research' 
 be vastly increased. Surely no nobler field for 
 philanthropic effort exists. He who brings but an 
 acre of hitherto waste land into cultivation has done 
 a God-like action ; he has practically created, if not 
 life, the means whereby life is sustained. God speed 
 the pioneer ! he is the true Economist, though he 
 never heard of the " wealth of nations." 
 
 Of the very utmost importance also is the proper 
 distribution of land. The next best thing to render- 
 ing unproductive land productive is evidently to 
 make the best use of land already available ; and 
 that policy is equally evidently to be commended 
 which assists distribution. The rival claims of Free 
 Trade and Protection upon this point will very 
 shortly be shown. 
 
 The definition already given of capital sufficiently
 
 14 The Trade Policy of Federation. 
 
 explains both its nature and its functions. It must 
 neither be confounded with wealth, of which it is only 
 a component part, nor with money, which is but one 
 of the numerous forms under which it appears. 
 
 Labour is the most unmanageable of the three ele- 
 ments, not from man's ignorance of its nature, but 
 from the fact that it runs counter to man's own 
 nature. The one solid fact so far evolved from the 
 iiebul(S of economic philosophy, is contained in 
 Malthus' " Law of Population," to which reference has 
 already been made ; and that law is the Nemesis of 
 labour. Shorn of theoretical embellishments, it may 
 thus be expressed : " Population tends to increase very 
 much faster iJuin the vuans of subsistence^ IMalthus 
 tried to reduce I't to mathematical accuracy by 
 actually defining the several rates at which popula- 
 tion and production tend to increase ; the former he 
 affirmed follows a geometrical, and the latter an 
 arithmetical ratio, i.e. population tends to increase as 
 the figures i, 2, 4, 8, 16, etc., production as the figures 
 I, 2, 3, 4, 5, etc. He furthermore attempted to show 
 that a given population would, if unchecked, double 
 itself in 25 years, and would, if still unchecked, re- 
 peat the doubling indefinitely. To give him his 
 due, he made out a very strong case both for his 
 ratios and for his doubling period. But he proved 
 neither. The sum-total of his arguments, backed by
 
 The Trade Policy of Federation. 1 5 
 
 such historical experience as he could discover, by- 
 no means entitle his figures to rank as part and 
 parcel of the law itself. He would have acted more 
 wisely had he omitted them ; but that could hardly 
 be expected of a theorist. As a result of his over- 
 anxiety for mathematical accuracy, he left himself 
 open to a storm of criticism which has blinded men's 
 eyes to the real value of his enunciation. His 
 numerous opponents naturally attacked him on his 
 weakest points, and by throwing discredit upon his 
 figures, threw discredit also upon his law, of which, 
 in reality, these figures were an unnecessary, ill-judged, 
 attempted illustration. 
 
 The intrinsic truth of the law itself is obvious ; it 
 is confirmed by the history of the past, fully justi- 
 fied by the convincing experience of the present, and 
 (so long at least as human nature shall remain un- 
 changed) an unerring index to the future. To any 
 one who shall calmly consider it, it is a terrible law, 
 from which there is no escape. Its conclusions are 
 grim and inevitable. No more persons can exist 
 than there is a supply of necessaries to support. 
 That supply cannot be increased, with all our efforts, 
 as fast as these persons can multiply without any 
 effort at all. Those for whom there exists no pro- 
 vision must die of want if they are born. Neither 
 the " struggle for existence " nor the " survival of
 
 1 6 The Trade Policy of Federation. 
 
 the fittest," are empty sounds ; they are hard, every- 
 day realities. 
 
 This ineradicable tendency of population to out- 
 run production is obviously the cause of poverty; 
 and poverty, in its turn, is the great drag upon 
 labour. A labourer's wages include his share in the 
 profits of production as well as providing him with 
 the means of subsistence ; they should therefore be 
 more than enough for his support. So they are. In 
 no civilised community do a man's wages only just 
 suffice for his own livelihood. There is always a 
 surplus, small o*", great ; and upon that surplus those 
 dependent upci,i the labourer have to rely for the means 
 of existence. For how many such dependents will 
 this surplus be sufficient ? The answer to this ques- 
 tion will, of course, vary in different localities and at 
 different times. Is it possible to strike an average ? 
 It is, by comparing the wages paid to any particular 
 class of labourers including or excluding their main- 
 tenance ; or, in other words, by observing the differ- 
 ence in wages received by labourers who, as they 
 term it, " find themselves " and by those who are 
 "found " by the employer. It will then appear that, 
 taking a general average of all descriptions of un- 
 skilled labour, very nearly two-thirds of the labourer's 
 earnings are consumed by himself, leaving, conse- 
 quently, a little over one-third for the support of those
 
 The Trade Policy of Federation. 1 7 
 
 dependent on him. In skilled labour, these propor- 
 tions vary materially ; it costs, for instance, no more 
 to feed a bricklayer than it does to feed a hodman, 
 and the difference in rate of wages tells heavily in 
 favour of the bricklayer's surplus. The disproportion 
 is still more marked when we come to consider what 
 may be termed scientific labour (the professions, art, 
 brain work generally). It is therefore easily under- 
 stood that a doctor or a mechanic can contrive to 
 support a wife and family ; but how can the tens of 
 thousands of unskilled labourers do the same ? Does 
 it not simply become a struggle to feed perhaps half- 
 a-dozen mouths with food insufficient for two, to say 
 nothing of shelter and clothing ? Is it not a pro- 
 longed series of experiments to prove the very 
 smallest amount of necessaries upon which life can 
 be sustained ? And do not the subjects of the ex- 
 periments die off in shoals ? Poverty, the most 
 terribly expressive word in the language, simply em- 
 bodies the natural sequence of effect from cause. 
 
 Unfortunately, mankind will not see this, or, at all 
 events, will not act as if it saw it, preferring any ex- 
 planation offered to the right one. The Economists 
 for once are not to blame ; they are, upon the whole, 
 sane enough on this point. But other theories are 
 eagerly pushed forward : Socialist-theories, Radical- 
 theories, Ranter-theories, theories of every degree and
 
 1 8 The Trade Policy of Federation. 
 
 shade of logical absurdity. We are urged to confis- 
 cate all property and rc-divide it fairly. Would that 
 increase the amount of the property? We are 
 warned to remove class distinctions. Would that 
 put the yokel upon a level with the man of science ? 
 We are told from the pulpit that poverty springs from 
 human wickedness. Is that consistent with the teach- 
 ings of Him who foretold that " the poor ye shall 
 always have with you " ? I have said that the Econo- 
 mists see this particular matter in the right light, so 
 far as cause and effect are concerned. But they 
 break out as wildly as ever as soon as they leave fact 
 and attempt to shovjv how the evil may be mitigated. 
 Malthus, followed by a numerous clerical school, ad- 
 vocates what he calls moral restraint, that is, that 
 human beings should not breed so fast. This is not 
 bad advice — theoretically. Practically it weighs as 
 nothing against the very strongest of all human pas- 
 sions ; nay, the clergy themselves are proverbially the 
 worst offenders. Other philosophers advocate emi- 
 gration, omitting, however, to indicate how such 
 wholesale depopulations, as alone could produce any 
 marked effect, are to be carried out, or how, even if 
 that difficulty could be got over, the emigrants are to 
 live during the period when, as Ricardo has it, new 
 land " pays no rent." A third school bids us not to 
 trouble ourselves at all upon the subject. Starvation,
 
 The Trade Policy of Federation. 19 
 
 with its train of diseases, murders, etc., is, we are in- 
 formed, a natural and infallible " check to overpopu- 
 lation," Wars, too, we learn, help largely ; whilst 
 baby-farms, though doubtless very shocking to 
 humanitarian principles, were, until stopped, of great 
 economic value. Statistics would tend to show that 
 society has tacitly adopted the cold-blooded views of 
 this third school. In Europe, the poor swarm ; 
 famine is chronic ; disease is daily assuming fresh 
 forms ; the hangman still earns a living ; ten millions 
 of armed men are ready at a word to butcher one 
 another ; infanticide keeps the coroners busy. Can 
 nothing be done? Are all nations, however seem- 
 ingly prosperous their present condition, doomed to 
 culminate in tJiis ? If they follow in the beaten 
 track of older nations — yes ; what can save them ? 
 If they base their social polity upon the lines plainly 
 indicated by experience, by common sense, and by 
 the simple considerations of profit and loss — no ; 
 evil results cannot follow from good policy. New 
 countries, young communities, enjoy enormous advan- 
 tages. Production is so easy that it can for a time 
 defy population ; nay, in its exuberance, it challenges 
 and invites population, just as if that all-devouring 
 monster would not come quite soon enough of his 
 own accord. " More labour ! " is the cry. " The 
 country must be developed, and then we'll be a great
 
 20 The Trade Policy of Federation. 
 
 nation." So long as production keeps well ahead, or, 
 at least, well abreast of population, this national en- 
 thusiasm to " grow up " quickly is a charming thing 
 to contemplate. There never was a child yet who 
 did not sigh for maturity ; but how many struggling 
 men and women sigh for childhood again ? What 
 has the well-fed, well-paid labourer living in a small 
 community to gain by that community's growth ? 
 Does he suppose his wages will be greater? Does 
 his brother-yokel in thickly-peopled England or 
 France or Germany enjoy greater profits than he 
 Or is it a more glorions 'ching to be a unit of thirty 
 millions than a unit ck-i half a million ? What is the 
 cause of this intense longing for a big census? 
 Whatever it be, it is a worthless one. National pros- 
 perity, i.e. the comfortable existence of all classes of 
 the community, is not synonymous with national 
 wealth. England possesses more national wealth 
 than Holland, ten times more perhaps. But can she 
 be compared in point of prosperity of her people to 
 that glorious little country which has not a pauper 
 within its boundaries? The Dutch are not a brilliant 
 nation, they lack the " go-ahead " qualities upon the 
 possession of which the Anglo-Saxon so much prides 
 himself; but they have a truer conception of material 
 welfare than any other people in the world ; they 
 realise — they show by their laws, by their customs,
 
 The Trade Policy of Federation. 2 1 
 
 by their systems, that they reaHse the full benefits of 
 rational distribution of the elements of production. 
 Their territory is small ; much of it has been re- 
 covered from the ocean ; every year sees many thou- 
 sands of acres of hitherto water-covered soil added to 
 the national estate ; their engineers are now draining 
 the Zuyder Zee into a new province. This is going 
 at the root of the social problem with a vengeance ! 
 The Dutch have a most unfavourable climate, but 
 they make the most of it. They have learnt by ex- 
 perience what they can produce best, and in their 
 own lines of produce they stand unrivalled. WJiat 
 they cannot produce at a mininmin cost, they btiy — the 
 very essence of commercial wisdom. Among the 
 dense native populations of even Java and Mandura, 
 they have introduced the distributive " culture sys- 
 tem," which abundantly supplies all local wants and 
 leaves a large margin of produce for exportation. 
 Finally, they have strict, somewhat repressive, laws 
 on the subject of marriage, and a very pronounced 
 public opinion against undue procreation. Other 
 nations, with singular unanimity, select the Dutch as 
 typically slow and dull. These are not such bad 
 qualities in the race which ends in the goal called 
 Poverty. Festina lente is good advice to nations, as 
 to individuals. Be it never forgotten that labour 
 alone is not a source of wealth, that it only becomes a
 
 2 2 The Trade Policy of Federation. 
 
 source of wealth when it acts in harmony with the 
 two other elements of production. To be thus in 
 harmony, it must not exceed their requirements, and 
 it must be divided so as to meet these requirements ; 
 it must, in short, neither exceed the demand nor be im- 
 evenly distributed. If these two conditions could be 
 realised, an ideal state of society would follow ; but, 
 unfortunately, the first is practically past hoping for, 
 so long as 
 
 Man on many multiplies his Kind. 
 
 The second condi^i/^ it should be the main object 
 of national polity to fulfil. 
 
 Now it is worthy of notice that whereas the value 
 of distribution of labour (or "division of labour" as 
 it is often called) is pretty generally appreciated in 
 particular instances, its application to large bodies of 
 men is rarely dwelt upon ; while the corresponding 
 importance of an intelligent general distribution (we 
 use the word throughout in the sense already defined} 
 of land and capital is left entirely to individual enter- 
 prise. It is assumed that mankind will, without 
 teaching, naturally devote land to that form of pro- 
 duction to whfch it may be best suited ; that capital 
 will follow suit because it tends to seek the most 
 profitable investment ; and that labour must follow
 
 The Trade Policy of Federation. 23 
 
 land and capital. People are neither such fools, it is 
 urged, as to attempt to grow sugar-cane in Canada, 
 nor to neglect the opportunity of profitably employing 
 capital in New Guinea. This style of argument 
 simply begs the whole question. It assumes a 
 generally-diffused knowledge amongst mankind of 
 the various capabilities of different localities, whereas 
 in point of fact few men know anything of the nature 
 of even the soil they dwell upon. The common 
 question is, not, " What will this ground grow best ? " 
 but, "What do I want it to grow?" The general 
 ignorance of even the most elementary geological in- 
 dications is still more marked. 
 
 How many men have starved upon apparently 
 barren soil which contained mines of mineral wealth 
 a few feet from the surface ? It is surely but feeble 
 argument to credit men with powers of selection and 
 discrimination which their utter ignorance debars them 
 from possessing. Legislation has simply been stag- 
 nant upon questions which should be the subjects of 
 nine-tenths of all statesmanship ; the so-called de- 
 partments of agriculture, mining, geological survey, 
 etc., are but a mere instalment of urgently-needed 
 activity. 
 
 In view of the subject of the present work, we 
 are now prepared to estimate the relative merits of 
 Free Trade and Protection from the all-important
 
 24 The Trade Policy of Federation. 
 
 standpoints of production and distribution; their 
 bearings upon international relations will more con- 
 veniently be considered later on. For the moment, 
 the most evident fact is that the better policy is that 
 which most encourages rational distribution and, 
 necessarily, also production. Now, which will the 
 more tend in this direction : a policy which restrains 
 men's liberty of choice, or a policy which leaves that 
 choice free? Obviously the latter. Which then is 
 the restraining policy and which the free? The very 
 names of the rival systems sufficiently foreshadow 
 the answer ; but names are sometimes misleading 
 and require to be dis-'vjjted. 
 
 The whole idea of Free Trade is based upon the 
 belief that every man is the best judge of what will 
 be to his own advantage ; and that, hence, the com- 
 munity, as a whole, will gain most by non-interference 
 with legitimate individual freedom of action. This 
 view would certainly appear to allow mankind to 
 exercise to the fullest extent such small powers of 
 judgment as the prevalent ignorance, already bewailed, 
 admits of No man will, for instance, attempt to pro- 
 duce a commodity which he cannot afterwards dispose 
 of at a profit. lie will naturally devote his energies 
 to that particular branch of production wherein he 
 enjoys some special advantage of climate, soil, situation, 
 etc. Like our slow-moving Dutch kinsmen, what he
 
 The Trade Policy of Federation. 25 
 
 cannot profitably produce, he will buy. And, assuming 
 him to have correctly estimated his own best-paying 
 line, he will be in the enviable position of producing 
 at a minimum of cost, of selling, therefore, at a maxi- 
 mum of profit, and of being able to purchase neces- 
 saries, which he could not himself produce except at 
 a loss, at their market value. More than this cannot 
 surely be expected ; what more, indeed, could be 
 attained, unless products rained down from heaven as 
 did the manna of old ? It is quite beside the question 
 to object that men do not, under Free Trade principles, 
 secure all these benefits. That is not the fault of the 
 principles but of men's as yet dense ignorance of the 
 particular capabilities of different sorts of land under 
 different conditions of climate and situation ; and also 
 the fault of those communities which, by refusing to 
 recognise the principles, block a large portion of the 
 markets of the world. The Free Trade community 
 has, at least, the comfort of knowing that its production 
 will increase in natural, enduring channels with the 
 gradual spread of knowledge upon the subject of dis- 
 tribution. 
 
 Protection is an attempt to substitute artificial for 
 natural laws of production. So far we have no 
 quarrel with it ; the vast majority of human ordinan- 
 ces are artificial, and where it can be shown that they 
 are an improvement upon natural laws, they should
 
 26 The Trade Policy of Federation. 
 
 unhesitatingly be adopted. Is Protection such an 
 improvement ? How does it look from a productive 
 or from a distributive point of view ? Well, at the 
 first glance, Protection does not idiXOViX profitable dis- 
 tribution, though it encourages, or tries to encourage, 
 every known form of production. This is a very 
 sweeping charge, but very easily proved. Protection 
 aims at self-support, at commercial independence of 
 foreign products. It begins by refusing to admit 
 foreign manufacturers to compete with its own, and 
 calls this " encouraging native industry." But native 
 industry must have ravy material to work upon, and, 
 of course, wants \.q "get its material at Free Trade 
 prices. To this the native producers object, refusing 
 to see why they should sell, say, hides at Free Trade 
 price and buy boots at Protection price. They, there- 
 fore, must be protected too. Then other industries 
 must be protected. 
 
 Finally, everybody and everything is protected. 
 For a time all things look flourishing; business is 
 brisk, lots of money circulate, and everyone is con- 
 tent. Then comes Nemesis with slow, unerring 
 steps into the fool's paradise. Things begin to look 
 gloomy ; business is slack, money is scarce, everyone 
 is grumbling. What has happened? A "wave of 
 depression!" cry Protectionists, "which, sweeping 
 over the world, has even affected us for the moment!"
 
 The Trade Policy of Federation. 27 
 
 Waves of moonshine ! What have waves of a)iy- 
 thing to do with a community which deliberately 
 shuts itself out from the commercial sisterhood of 
 nations ? If this be so, then Protection does not 
 mean commercial independence — has not even that 
 shadowy claim to be respected. What then really 
 has happened ? Nothing, except an inevitable 
 sequence of effect after cause. While Protection 
 throve, this is what was going on : an enormous and 
 varied assortment of production was engaged in ; it 
 was only necessary to get any article added to the 
 Protective tariff to make it at once a profitable line — 
 for local consumption ; and capital flowed in freely. 
 These were the halcyon days, before the local supply 
 overtook the local demand. Every one, it is true, 
 paid dearly for everything ; but what did this matter 
 when wages were high and work plentiful ? The 
 producers of raw material did not mind paying Pro- 
 tection rates for manufactured articles, because they 
 were getting Protection prices for Diost of their pro- 
 duce, and could ship the surplus to free Trade 
 markets. The manufacturers were simply scratching 
 one another's backs. The working-men, as is usual 
 with the class, reckoned their earnings rather by the 
 number of shillings per diem than by the purchasing 
 power of those shillings. Working-men from other 
 communities, likewise confusing number with value,
 
 2 8 The Trade Policy of Federation. 
 
 flocked in, thereby taking "some of the gilt off 
 the gingerbread," however. The national legislators 
 rubbed their hands and pointed to the flourishing 
 results of Protection. In their eyes, from their 
 mouths, the position was clear. The country was 
 exporting its surplus produce : this was clear gain. 
 The country was not importing foreign produce : this 
 was clear avoidance of loss. It was all (or nearly all) 
 get and no give. It seems strange that this very one- 
 sidedness has never raised doubts as to the soundness 
 of Protection. It is on record that an eccentric 
 person once exposed re?' sovereigns for sale, at one 
 shilling each, in a cv^ .vdcd London street, for many 
 hoxxrs, without JiJidiiig a single purchaser. It is not 
 easily credible that any one will deliberately trade at 
 a loss ; if he appears to do so, there is usually "some- 
 thing behind." 
 
 Now if Protection be sound and have really this 
 enormous apparent advantage in its dealings with 
 Free Trade, there can be nothing in store for the 
 latter but bankruptcy ; every year Protection must 
 go ahead, and every year Free Trade must go astern. 
 Alas for theory ! there is something behind, a very 
 big something, a very awkward something to get 
 round, a something called over-production. We have 
 glanced at Protection in its glory ; let us observe it 
 under a cloud. Much-encouraged production helped
 
 The Trade Policy of Federation. 29 
 
 on by rash, beguiled, over-sanguine distribution, has 
 gone well ahead of all local demand. Now mark the 
 contrast. The producer, instead of being able to sell 
 most of his produce at Protection rates, and export 
 only an inconsiderable portion of it now finds the 
 local market glutted, and is driven either to sell at 
 home at unremunerative rates, or keep his produce 
 on hand, or export it to Free Trade markets. Very 
 nice alternatives. If he sells at home, he loses ; if he 
 does not sell at all, he loses ; if he exports, he — let 
 us see how he fares if he exports. The produce he 
 has to sell has been produced at Protection rates. If 
 he exports, therefore, he has to compete against pro- 
 duce raised at Free Trade rates in a Free Trade 
 market ; and that means dead loss. Whether he be 
 raw producer or manufacturer matters only in degree; 
 lose he must. The working-man sees the number of 
 his shillings per diem steadily diminishing, and has 
 become so much accustomed to paying Protection 
 prices that he is slow to realise their additional pur- 
 chasing power in a glutted market. He grumbles, 
 gets up mass meetings, and clamours for more Pro- 
 tection — meaning, of course, more shillings. Legis- 
 lators make the most of waves of depression, talk 
 loudly of retrenchment and economy, clap on a few 
 more items to the tariff, and look eagerly round for a 
 " scape-goat " — bloated millionaires and big estates
 
 30 The Trade Policy of Federation. 
 
 are always available at a pinch. But, henceforth, 
 Protection is playing a losing game. In a rich com- 
 nuinit)-, with vast natural resources to fall back upon, 
 it is possible for it to die very hard. Certain classes 
 of producers, manufacturers, and working-men may 
 thrive throughout the piece. Vested interests, based 
 on Protection, will nail their colours to the mast and 
 fight to the bitter end rather than throw open the 
 closed ports on which they have relied. A sudden 
 reversion of the national policy would inevitably 
 mean equally sudden ruin to many. Perhaps the 
 ver^' worst features in t'tie Protection system are, its 
 fascination over mct\S:i minds even after disaster, and 
 the extreme difficulty of at once rescinding it with- 
 out serious immediate national loss. Like all other 
 errors, it must sooner or later be atoned for. But 
 there would seem to be no reason why the atonement 
 should not be gradually effected, why a mistaken 
 policy (once recognised) should not be gently re- 
 placed by a sound one without seriously disorganis- 
 ing society. 
 
 You cannot without much reflection realise the 
 difficulty of instituting comparison between the rival 
 systems, with respect to different branches of com- 
 mercial polity, without intermingling these branches. 
 Thus, in dealing with production, I have purposely 
 refrained, so far as possible, from all direct reference
 
 The Trade Policy of Federation. 3 1 
 
 to foreign trade, because this latter is reserved for 
 separate and special analysis. I therefore deprecate 
 the numerous objections which might be advanced 
 did our inquiry end here, premising that I will, before 
 we take leave of the subject, anticipate, and (to the 
 best of my power) answer, most of these objections. 
 
 Consumption is the using-up of the fruits of pro- 
 duction ; it is obviously as necessary to human 
 welfare as production itself, of which, indeed, it is the 
 natural consequence. It is a bad thing for production 
 to lag behind consumption, because that means want. 
 But it is also a bad thing for consumption to lag 
 behind production, because that means stagnation. 
 Here we get a sample specimen of theoretical hum- 
 bug. From the days of Adam Smith it has been " an 
 accepted theory " that consumption of all things not 
 necessary to human existence is destructive to 
 national growth, that (to quote the stock example 
 invariably trotted out) "the spend-thrift is a greater 
 public enemy than the miser," because, as is alleged, 
 capital expended upon champagne and cigars is 
 " wasted," which might have been devoted to cheese 
 and mangold-wurzel, whereas a miser's capital is simply 
 temporarily withdrawn from active service. Heavens ! 
 to what lengths will not theorists go! Let us suppose 
 that all civilised men followed up this precept and 
 hoarded up all capital not required for production of
 
 32 The Trade Policy of Federation. 
 
 necessaries. Result ? Extreme cheapness and abun- 
 dance of necessaries ? Not a bit of it. Every one 
 being intent on saving, consumption would be at a 
 minimum, production would be at a minimum too, 
 and enforced idleness would follow. Mankind would 
 simply relapse into the indolent stagnation of savage 
 life — if such existence can be called life. Consump- 
 tion is the index to production. The greater the 
 consumption, the greater the production tends to be. 
 The greater the production, the greater the distribu- 
 tion. The greater the distribution (most important of 
 all), the greater the r^ci-reral welfare. So long as 
 enough of a nation'?^, capital is devoted to the neces- 
 sary production required to meet necessary con- 
 sumption, the residue is better employed ministering 
 to human enjoyment and happiness (not synonymous 
 with bare food, raiment, and shelter), than in lying 
 idle, the whole Army of Faddists to the contrary 
 notwithstanding. Luxury consumption becomes an 
 evil only when it encroaches on necessary capital. 
 The mediaeval baron who threw away the year's 
 savings of a thousand peasants upon a suit of gilt 
 armour was an unmitigated curse to the community, 
 because there was no surplus capital to replace his 
 pillage. The modern baron who spends a portion of 
 his rents in carriages, and horses, and pictures, and 
 wines, furnishes employment to carriage-builders, and
 
 The Trade Policy of Federation. 33 
 
 horse-breeders, and artists, and wine-growers. His 
 rents are not required for necessary production. 
 They belong to the vast surplus capital of the nation. 
 Experience has taught the community that they so 
 belong, and that they will not be devoted to neces- 
 saries alone. The community takes its measures 
 accordingly, and some of its members engage in the 
 branches of production shown, by experience also, to 
 be what they will be devoted to. To sum up, the 
 capital of the community is greater than can be pro- 
 fitably employed in necessary production ; surplus 
 capital will not engage in production, the results of 
 which must either be given away or allowed to rot ; 
 therefore, it must either be locked up or be devoted to 
 supply the demands of luxury consumption, Adam 
 Smith and Franklin, upon consumption, always sug- 
 gest two questions : Did they ever drink wine, or 
 smoke, or use a carriage ? Did they ever read Mores 
 Utopia ? 
 
 If now we proceed to compare our rival systems 
 from a consumption point of view, we shall find our- 
 selves going over much of the ground already traversed 
 in dealing with production. One point, however, 
 becomes more strongly emphasised. Protection, which 
 aims at supplying all the demands of its own local 
 consumption, can only do so within certain limits, 
 always at a heavy, and often at a prohibitive cost.
 
 34 The Trade Policy of Federation. 
 
 No more effective restraint upon consumption could 
 well be devised, without a revival of the " old sumptuary 
 laws.'' If a man has to pay double prices for the 
 articles he consumes, he will certainly not consume so 
 largely as he otherwise would. And if (as but too 
 often follows from a Jack-of-all-trades system) the 
 double priced article is of inferior quality besides, he 
 will, if he possibly can, dispense with it altogether. 
 And if, owing to a deficiency in the local supply, a 
 commodity has to be imported, that commodity will, 
 almost to a certainty, be inferior, since it has to come 
 to the market saddled with a Protective duty. Both 
 foreign manufacturers and local middlemen know 
 very well that this duty added to the cost of a 
 superior article would make the latter too dear to be 
 saleable. Ready sale is all they look to ; the Pro- 
 tective duty coniGS out of the consumer's pocket, not 
 out of theirs ; the inferior article is imported, and the 
 unhappy consumer finally gets neither fair value nor 
 fair quality. Herein neither the manufacturer nor 
 the middleman is to blame ; each simply adopts the 
 only course consistent with Protection and his own 
 profit. It is the consumer who controls legislation ; 
 if he suffers, he may thank his own stupidity. 
 
 From even this brief analysis of the effects of Pro- 
 tection upon local production and distribution, it will 
 be seen that it is, as I foreshadowed, radically an un-
 
 The Trade Policy of Federation. 35 
 
 sound system ; and the more exhaustively you think 
 the matter out, the more strikingly will this radical 
 unsoundness appear. But, as also previously inti- 
 mated, this does not definitely decide the question at 
 issue. It could just as easily be shown that standing 
 armies are radically a mistake, an impoverishing 
 drain upon the resources of a nation. Yet standing 
 armies, as the world is at present constituted, are, from 
 motives of expediency, not alone justifiable but 
 necessary. No doubt in the days of the millennium 
 they will cease to be required. But in the meanwhile 
 it would be very ruinous policy for, say, England to 
 disarm and oppose common-sense logic to Russian 
 ironclads ; she would infallibly get the worst of it 
 practically, however sound her peaceful principles 
 might theoretically be. She maintains forces by land 
 and by sea not because it is a morally proper thing to 
 do, but because it is expedient, because it pays, 
 because it would not pay to disband them. Other 
 nations shape their policy upon similar lines ; and, 
 with a fervour as ludicrous as it is impious, each invokes 
 the God of peace to bless the weapons of war. Now 
 national armaments are but measures of Protection 
 designed to secure national interests. We are not 
 playing upon the word. Armies and fleets are but 
 warlikeexpressions of the same idea as thatembodied in 
 peaceful duty-tarifls: both seek to protect a community
 
 36 The Trade Policy of Federation, 
 
 from being victimised by other communities; the adop- 
 tion of either, or of both, may be justified by necessity 
 or expediency ; and of such necessity or expediency 
 each community will judge for itself, unrestrained by 
 moral, logical, or any other theoretical considerations. 
 It is therefore not enough to demonstrate that a given 
 policy, such as Protection, is unsound in principle. 
 It is necessary, indeed, to do so in order to make out 
 a prima facie case against it ; and such a case we 
 have endeavoured to state. But when that is done, it 
 must further be brought home to Protectionist, or 
 would-be Protectionist, communities that Protection 
 is also inexpedient and unnecessary. If this be not 
 done, nothing is done : the Protectionists simply 
 shrug their shoulders and say, " Protection may be as 
 bad as, or even worst than, you describe it ; it may be 
 radically as rott^-n as sin, but it suits our book ! " 
 Wherein the Protectionists display considerable 
 judgment, for possible Expedientcy is the one 
 solitary leg their system has to stand upon. That 
 Protection may be adopted with success they invariably 
 seek to prove by pointing to the marvellous growth of 
 the United States, nor do Free Traders at all weaken 
 this illustration by quoting the Trade returns of 
 England, Both nations have grown enormously 
 wealthy by pursuing totally different systems ; but 
 this fact would tend rather to prove that both systems
 
 The Trade Policy of Federation. zl 
 
 may be, under different conditions, politic, than that 
 one is inferior to the other at all times and in all 
 places. And that this is in reality a correct inference 
 may conclusively be established by an unbiassed com- 
 parison of the great rivals. 
 
 In one element of production England is definitely 
 and irremediably deficient — extent of land. She is 
 limited to an area, including Wales, Scotland, and 
 Ireland, of 121,000 square miles; and she is not 
 especially favoured in the matter of climate. A 
 century ago she was already rich in the two other 
 elements, labour and capital. She was moreover 
 what would now be called Ultra-Protectionist ; she 
 not only kept foreign products out of her markets by 
 a perfectly crushing tariff, but she taxed even her 
 own products, if exported. Corn, for instance, was 
 taxed both ways to famine prices. She tried to force 
 her Protectionist policy upon the North American 
 Colonies, and lost them in the attempt. But she 
 adhered to her exclusive doctrines at home with un- 
 swerving fidelity, until the popular objection to starve 
 upon Protected corn culminated in an outburst, under 
 Richard Cobden, which sounded the knell of Protection 
 in England. A very remarkable man was this same 
 Richard Cobden ; a man who, with little pretension 
 to education or culture, saw the errors of the prevalent 
 system in a light which scholarly statesmanship had 
 
 .'j;y 1.868
 
 38 The Trade Policy of Federation. 
 
 no glimpses of. " Bread," he argued, " is of para- 
 mount importance to the community ; and therefore 
 a pohcy which tends to make bread scarce and dear 
 must be rotten." This was the burthen of his cry 
 from his place in Parliament. Time after time the 
 Protectionist House threw out his bills. Time after 
 time he returned to the charge. At last the force of 
 his argument came home to Sir Robert Peel, and 
 that clear-headed minister succeeded in passing bills, 
 in 1842-46, which practically established Free Trade 
 in corn. This was the thin edge of the wedge which, 
 now thoroughly aroused, public opinion soon drove 
 home. England, from being the most bigoted Pro- 
 tectionist in the universe, became the champion of 
 Free Trade. 
 
 Cobden advocated another principle, with equal 
 fervour, but w\th by no means equal success. 
 England, he contended, had no business whatever to 
 mix herself up with European politics ; her mission 
 was to trade, not to fight. Therefore she should dis- 
 band her forces and substitute non-interference for her 
 foreign policy. 
 
 Now, how came this rapid and radical change in 
 commercial policy about ? And why was it not 
 accompanied by an equally radical change in foreign 
 policy ? Why did not war estimates follow the Pro- 
 tective tariffs ? Cobden was as much right upon one
 
 The Trade Policy of Federation. 39 
 
 point as upon the other, logically. Why then was only 
 half his scheme listened to? Why was he reverenced 
 during commerce debates as the apostle of Free 
 Trade, and laughed at when the army and navy 
 estimates came on as the man with a hobby ? Ex- 
 pediency : this one word answers all these questions. 
 England could not feed her people, therefore she 
 must encourage food imports. England wanted raw 
 material for her multitudinous industries, therefore 
 she must encourage imports of raw material. England 
 could laugh at foreign competition in manufactures, 
 thanks to her coal, and her iron, and her vast in- 
 dustrial capital, and the skill of her workmen, there- 
 fore she need not tax manufactured imports. But 
 England must keep a firm hold on, and a clear road 
 to, her foreign possessions : " the balance of power 
 must be maintained," which means, that foreign and 
 possibly hostile nations must be made to balance and 
 neutralise each other's aggressive power ; and her 
 extensive shipping interests must be vigilantly 
 guarded. Besides, Jem Mace's pithy advice, " If you 
 want to avoid rows, learn how to box," or, as the 
 Roman sage more elegantly phrased it, " Si vis 
 Pacem para Belluni" is sufficiently corroborated by 
 national history, as well as by individual experience, 
 to shelve the disarmament hobby. Fortunate 
 England, that could thus combine her own best
 
 40 The Trade Policy of Federalion. 
 
 interests with the adoption of "broad, sound principles 
 of moral right," as some one has sonorously expressed 
 it ! Prudent England, to temper even concessions to 
 moral right with additions to the royal navy! Soyons 
 Candidas. So long as England could feed her own 
 population and supply her own factories with raw 
 material, she was Protectionist to the core. Had she 
 possessed sufficient area and sufficient resources to 
 keep up these supplies. Free Trade would never have 
 been dug out from the mine of theories known as 
 " the wealth of nations," either by Richard Cobden, or 
 by John Bright, or by anybody else. 
 
 Teinpora nmtanttir et nos mutamur in illis. The 
 United States, which secured their ultimate indepen- 
 dence through a struggle, at first fought for Free 
 Trade, have since then developed into the most 
 determined uphold«>rs of Protection. Expediency 
 again. The language of Cobden was as intelligible 
 to Americans as to Englishmen, but (perhaps because 
 they were not so hungry) they had ears for that 
 portion only of his logic which England ignored — 
 the economic folly of large armaments. Free Trade 
 they would have nothing whatever to do with. Did 
 they thereby consult their own best interests or not ? 
 A problem not to be answered by pointing to 
 American Trade returns since (inasmuch as we 
 have no means of knowing that America would not
 
 The Trade Policy of Federation. 41 
 
 have thriven even faster under Free Trade) this 
 merely begs the question. A problem, moreover, 
 which, even did we possess this knowledge of what 
 would have happened^ could not be solved by a com- 
 parison of figures. It is one which mainly concerns 
 the American people, and must, therefore, be re- 
 garded from an American platform. National in- 
 terests are not ivholly a matter of £ s. d. 
 
 When England adopted Free Trade, what was 
 America's position ? An area of nearly four million 
 square miles, and comprising sufficient variety of soil, 
 climate, and mineral wealth to furnish well-nigh 
 every product of human industry ; a country capable 
 of some day supporting many hundreds of millions of 
 persons, actually peopled by some twenty-five millions. 
 A constant stream of immigration pouring in. A 
 food supply covering all local demands and leaving a 
 large margin for exportation. A rapidly-increasing 
 production of raw material also available — -for ex- 
 portation ? Why for exportation ? Why not for 
 home use ? Because, by the very simplest Trade 
 arithmetic, if America manufactured, she must do so 
 at a loss. Why, then, manufacture at all ? WJiy not 
 devote herself to producing and exporting raiv material 
 for England to manufacture ? Ah ! now we have 
 come at the root of the matter. 
 
 Trade means to exchange commodities for other
 
 42 The Trade Policy of Federation. 
 
 commodities or their equivalent value — if possible. 
 Practically, trade has for its object to buy as cheap, 
 and sell as dear as possible. When England buys 
 America's raw material, say her cotton, she buys 
 " cheap," i.e. she pays as little as she can help for it. 
 If, now, America bought England's manufactures, say 
 the same cotton worked t'-p into calico, would she be 
 buying cheap or dear ? Look at the thing straight. 
 America sells England ;^i,ooo worth of cotton, and 
 buys back the same cotton converted into calico for 
 ;^4,ooo : which has the better of the deal ? Of course 
 theorists here step in with a summary and con- 
 temptuous reply. " Neither ! " they cry. " The 
 ^3,000 difference merely represents the cost of trans- 
 forming cotton into calico. The calico is as cheap at 
 ;!^4,ooo as the cott*^;! was at ^i,ooo, because it cost 
 only iJ"i,000 to graw the cotton at a profit, whereas it 
 cost ;^4,ooo to manufacture it, also at a profit. In 
 such an instance we merely have an example of the 
 mutual benefits of trade." Very well ; but, after all, 
 America has received only ^i,ooo, or its value, and 
 has paid away ^4,000, or its value. What has 
 become of the ;^3,ooo ? Who has got it ? Has it not 
 gone towards the support of English workmen, or the 
 profits of the English manufacturer ? Admitting 
 that they all only barely get a living out of it, that 
 the American capitalist grower gets even a higher
 
 The Trade Policy of Federation. 43 
 
 rate of interest than the Enghsh capitalist manu- 
 facturer for his invested capital, and that the goods 
 are excellent and cheap, does it not, after all, mean 
 i^4,ooo devoted to English viamifacturing interests as 
 against £1,000 devoted to American Raw Production ? 
 " Oh ! " again cries theory, " such a query simply pre- 
 supposes utter ignorance of the most elementary 
 economic facts." [Pardon, my dreamy friends, 
 theories, not facts.] "If England can turn out an 
 excellent article cheap, she is entitled to manufactur- 
 ing pre-eminence. So long as she can produce goods 
 at a minimum cost, she must and ought to be the 
 chief source of the world's supply." Now, whether 
 she ought is a point which Americans have declined 
 even to discuss ; whether she must, they have, so far 
 as their section of the globe is concerned, pretty 
 thoroughly disproved. And are they not justified, 
 if they choose, in trying to build up manufacturing 
 interests of their own with this balance ? True, they 
 cannot manufacture so cheaply as England noiv, per- 
 haps they may not be able to do so for many years, 
 perhaps (rather a probable " perhaps ") they never 
 will be able to do so. Is that a sufficient reason for 
 not making the attempt ? Not, at all events, in 
 American eyes. We are, say our go-ahead kinsmen, 
 a great nation, and we are destined to become the 
 greatest nation upon earth ; we are not a province
 
 44 'The Trade Policy of Federation. 
 
 tied on to the apron-strings of any other nation. 
 We have an extent of territory that constitutes us 
 practically a new world. We have no more business 
 to be dependent upon the old world than we have to 
 be dependent upon the moon ; and we mean to be 
 independent of creation. To do that, we must not 
 only grow but manufacture what we require. At 
 first, no doubt, we shall be manufacturing at a heavy 
 figure, certainly at a heavier figure than some other 
 nations. The profits, no doubt also, will not, at first, 
 be extensive ; but, great or small, we intend to keep 
 them at home. If we prefer paying a high price for 
 native-made goods to paying a low price for foreign 
 goods, that's our own affair. A man may, without 
 being a fool, pay his son five dollars for a box which 
 he could buy, perhaps ^ better made, for three dollars 
 in a shop. He may say, " I want my boy to learn 
 how to use his tools, I know he can't make the box 
 for three dollars, and that others can. Still, I prefer 
 paying the additional money, which remains in the 
 family, and letting him get both the profit and the 
 experience." 
 
 This unbounded faith of Americans in the future 
 of America is a characteristic which even the most 
 cold-blooded exponent of the " dismal science " can 
 neither deride nor argue down. It is not sentiment — 
 or at least if it is, it is very high-minded sentiment,
 
 The Trade Policy of Federation. 45 
 
 vastly ahead of the sickly affectation of cosmopoli- 
 tanism so distinctive of the John Bright school. 
 
 America is, from her geographical position, toler- 
 ably secure from becoming involved in foreign wars. 
 Still complications might arise and cannot be totally 
 ignored as impossible. Suppose they did, and sup- 
 pose that America were dependent upon Europe for 
 manufactured commodities. Suppose {absit omen !) 
 England were against her. Result ? Very complete 
 blockade of all American ports, and stoppage of all 
 foreign imports. To guard against this contingency, 
 America might, indeed, if she chose, maintain a 
 powerful fleet. She very sensibly prefers to set off 
 the cost of this would-be necessary fleet against her 
 losses from local manufactures, make herself, by 
 means of these manufactures, independent of foreign 
 supplies, and find subject-matter for Sunday dis- 
 course in the folly and wickedness of national 
 armaments. If England tried to blockade the ports of 
 manufacture against independent America, she would 
 simply be cutting her own throat by cutting off her 
 own factories from their chief source of raw material. 
 
 There is no getting away from the conclusion that 
 the Americans are right from their point of view. 
 America cannot be judged by any other standard 
 than herself; she stands as )^et alone among nations. 
 With a population already exceeding the Etiropean
 
 46 The Trade Policy of Federation. 
 
 population of any other nation, she is still but an in- 
 fant to the America of the future. To compare her 
 policy with that of tiny, overpeopled England, de- 
 pendent for the very bread she eats upon her foreign 
 Trade, is as irrational as it is fruitless. Protection is 
 as expedient for America as Free Trade is necessary 
 to England. 
 
 The further question, for what length of time 
 should America adhere to this policy? does not come 
 within our province to examine, and may be dismissed 
 with the reflection that so soon as American manu- 
 factures can compete in Free Trade markets in any 
 particular commodity, the continued necessity for 
 protecting that commodity ceases to be very evident. 
 Of that, however, the Americans are the best judges. 
 What we now wish to direct attention to, is that the 
 example of the U'C^ited States is a very dangerous 
 one for less considerable communities to follow. The 
 frog who wanted to become like unto the ox came, 
 as we read, to sudden and unexpected disintegration — 
 a reminiscence which, without any intentional re- 
 flection upon the dignity of any existing British De- 
 pendency, brings us nearer home. We have now to 
 state, as clearly as we can and as exhaustively as our 
 limits will permit, the considerations upon which (if 
 our conception be correct) the Colonies should decide 
 between Protection and Free Trade. And these con-
 
 The Trade Policy of Federation. 47 
 
 siderations should stand out with convinchig clear- 
 ness if only the following questions can be satis- 
 factorily answered. 
 
 1. Is it possible for Australasia or Canada, as at 
 present constituted, successfully to tread in the foot- 
 steps of the United States ? 
 
 2. Would it be possible by altering their present 
 Constitution ? 
 
 3. Would such a course be conducive to their pre- 
 sent or prospective advantage ? 
 
 4. Can any alternative course be indicated offering 
 greater immediate or future advantages ? 
 
 1. Is it possible for the Colonies, as at present con- 
 stituted, successfully to tread in the footsteps of the 
 United States ? 
 
 To this question (again protesting our utter in- 
 nocence of intentionally wounding the national vanity 
 of any British community) we reply, Irishwise, by 
 asking another : Can a team of mules, all tugging 
 in different directions, draw a load which it has re- 
 quired the combined efforts of a more numerous and 
 more powerful team of horses to shift ? 
 
 2. Would it be possible by altering their present Con- 
 stitution ? 
 
 If they chatiged their team ? Certainly it would.
 
 48 The Trade Policy of Federation. 
 
 The seven Colonics of Australasia, for example, 
 possess far greater initial advantages in 1891 than 
 did the original thirteen Colonies of America when, 
 upon the 7th June, 1776, Richard Henry Lee formu- 
 lated his resolution (adopted by the Congress of these 
 Colonies upon July 4th of the same year) that " The 
 United Colonies are and ought to be free and in- 
 dependent States ; and their political connection with 
 Great Britain is and ought to be dissolved." Let us 
 briefly compare the positions. Land ? Australasia 
 covers 3,169,000 square miles; the United States 
 began with less than 600,000 square miles. Popula- 
 tion ? Nearly the same numerically ; but, with 
 modern facilities of transport and locomotion, and 
 with modern labour-saving machinery, capable of 
 achieving incomparably greater productive results. 
 Capital ? Beyond all comparison, in favour of 
 Australasia. Upon what grounds can it therefore 
 be doubted that if Australasia started upon the 
 American lines, she would achieve a success, at least, 
 equal to theirs ? But — she must weigh well what 
 those lines mean. They mean the proclamation to 
 the whole world of an Independent Australasian 
 nationality. They mean the Federal Union of all 
 the Colonies of Australasia, which, by the way, it 
 would be expedient, if not necessary, to subdivide 
 into more numerous States. They mean a Supreme
 
 The Trade Policy of Federation. 49 
 
 Central Legislature by whose enactments the national 
 policy must be shaped. They mean that this policy, 
 once adopted by the delegates of a majority of States, 
 must be binding upon all, else the Central Congress 
 becomes a farce and the Union a dream. Protection 
 is one such question of policy. Free Trade is another. 
 The choice between the two, if the American model 
 be copied, will be like Hobson's, and by that choice 
 all must be bound. Upon this point the history of 
 the American nation is clear and emphatic. The 
 stability of the United States has received many rude 
 shocks, and always upon the same question of 
 national commercial policy — Protection or Free 
 Trade. From the "Whisky War" in 1794 to the 
 terrible civil struggle which began in February, 1861, 
 the point at issue has always been the same — Pro- 
 tection or Free Trade. The Southern States, as the 
 great producers of raw material, and as having few 
 manufactures of their own, objected to the Protective 
 duties imposed, by authority of Congress, upon 
 foreign manufactured goods, simply, as they averred, 
 in order that the Northern States might reap the 
 profits of a monopoly in manufactures. This was the 
 causa ieterrima belli. The No-Slavery cry was a 
 cloak^ — not a sham altogether, for slavery zvas 
 
 1 The genuine extent of the northern sympathy for " coloured 
 brethren " has shown itself pretty plainly since the war. The 
 
 D
 
 50 The Trade Policy of Federation. 
 
 opposed to northern ideas in the abstract — to cover 
 the really vital issue, Protection or Free Trade. "A 
 house divided against itself shall surely fall." Had 
 this division been effected, had the Confederate States 
 been permitted to secede from the Union, or had they 
 been able, by force of arms, to uphold their secession, 
 their avowed intention was to adopt Free Trade. 
 To prevent the division, to maintain the Union, to 
 preserve Protection, the north unhesitatingly plunged 
 into war — war upon a scale so gigantic, so profuse of 
 blood and treasure, that the campaigns of Wellington 
 seem but as skirmishes in comparison. Protection 
 triumphed — but at what a cost ! And it is upon 
 these lines that the United States of Australasia 
 would have to follow if America be their model. 
 Like America, they must be prepared to rely upon 
 their own resources, and to suffer the heavy temporary 
 losses ; at all events, inseparable, as we have seen, 
 from Protective encouragement of native industries, 
 in order that they may eventually become, like 
 America, independent of foreign supplies. They 
 must cease to regard Protection and Free Trade as 
 
 utter contempt of the Yankee for the "nigger," his marked 
 avoidance of him, his distinct objection to eat with him, or 
 drink with him, or even travel in the same carriage with him, 
 are traits of race-prejudice which the most Conservative Britisher 
 could not exceed.
 
 The Trade Policy of Federdtion. 5 1 
 
 rival systems, concerning which there may be a 
 difference of opinion. They must consecrate Pro- 
 tection as the basis of the national policy, a basis to 
 be upheld, if need arise, at the point of the bayonet. 
 If Australasia is prepared to do and suffer all these 
 things, then assuredly nothing but a convulsion of 
 nature can prevent her from becoming in time the 
 mighty southern rival of the mighty west.^ 
 
 3. Would such a course be conducive to their present 
 or prospective advantage ? 
 
 To their present advantage, obviously not. Ex- 
 travagant production vi7ist mean immediate loss. 
 Bread cast upon the waters of Protection cannot 
 return until after many days. To their prospective 
 advantage then ? That hinges altogether upon the 
 meaning given to the word " advantage." If it be 
 merely a matter of £ s. d., of profit and loss, then the 
 probabilities pro or con can only be estimated by 
 annotating the chief factors of actual national wealth, 
 for of course the potential wealth (that is, the existing 
 but undeveloped natural resources) of a country can- 
 not be affected by national polity. Well, these chief 
 factors of actual national wealth are briefly : 
 
 (I.) The extent, quality, and distribution of cur- 
 
 ^ Mutatis mutandis, the reasoning applied to Australasia 
 applies with equal force to Canada.
 
 52 The Trade Policy of Federation. 
 
 rent production, including, of course, land, labour, 
 and capital. 
 
 (II.) The exces.s o^ profitable production over local 
 cousumption. 
 
 (III.) The facilities enjoyed for finding a market 
 abroad for this excess of profitable production ; that 
 is, the means of carrying on a Foreign Trade. 
 
 (IV.) The accumulation of the results of past pro- 
 duction, home or foreign. 
 
 (V.) Capital invested in unproductive property, 
 
 (VI.) National credit. 
 
 (VII.) The precious metals used as exchange- 
 medium, i.e. the amount of " money " in circulation 
 or available. 
 
 Now, it is not essential that all these factors should 
 co-exist in order that a nation m.ay be wealthy, a 
 consideration of the very utmost importance which 
 Economists seem to have overlooked. Or, perhaps, it 
 would be more accurate to say, that a particular 
 community may advantageously concentrate its 
 efforts upon certain of these factors, regarding the 
 others as of secondary importance. For instance, 
 whilst the first is of paramount importance to Pro- 
 tectionist America, the second and third are abso- 
 lutely essential to Free Trade England. 
 
 To a young, struggling community, again, national 
 credit often means success or failure, national pro-
 
 The Trade Policy of Fedei^ation. 53 
 
 gress or national stagnation. To which of them 
 should Australasia or Canada mainly pin her faith ? 
 They are all of them good things — very good things ; 
 but unfortunately it is, as we shall proceed to demon- 
 strate, impossible to secure them all in equal degree. 
 The first is peculiarly characteristic of, and conse- 
 quent upon, Protection. The two next are equally 
 peculiarly characteristic of, and consequent upon, 
 Free Trade. The others depend upon the amount of 
 success consequent upon the adoption of either 
 policy. 
 
 (I.) Extent^ quality, and distribution of current pro- 
 duction. — Protection, being avowedly designed to 
 make a community self-supporting and independent 
 of foreign supplies, can obviously only hope to 
 succeed in this design by the most strenuous local 
 productive efforts. The primary, all-engrossing object 
 is to meet all home demands without having re- 
 course to foreign aid. And, if the theory of Protec- 
 tion be followed to its highest imaginable pitch of 
 perfection, once this object is secured, there remains 
 no incentive to devote any considerable attention to 
 Foreign Trade. If one can suppose a community to 
 be practically independent of all other communities 
 for commodities, what could it accept in exchange 
 for any surplus it might wish to export ? Other 
 commodities ? What other commodities, if it already
 
 54 ^Ji(^ Trade Policy of Federation. 
 
 supplied all its own wants? Besides, consistent Pro- 
 tection excludes foreign commodities. Money ? 
 Money is mere dross once its exchange-value dis- 
 appears. Such luxuries, etc., as could not, even con- 
 ceivably, be produced by any one community? Yes, 
 they might be accepted ; and they would represent the 
 total foreign-trade interest of the community. Ideal 
 Protection would transmute " Happy the nation 
 which has no history," into " Happy the nation which 
 has no [necessity for] Foreign Trade." Alas for 
 ideal Protection ! Bursting its patriotic heart, strain- 
 ing its every fibre to secure Dead Sea fruit ; foregoing 
 an immediate tangible certainty to follow a distant 
 theoretical possibility; dropping, like -^sop's dog, 
 the meat of Trade to grasp at the shadow of Inde- 
 pendence ! It is not, of course, inferred that because 
 a community adopts Protection, it must necessarily 
 strain after any such ideal, and neglect its foreign 
 trade. But to judge a policy by the very utmost 
 ultimate advantages it has to offer is a perfectly 
 legitimate course, as indicating the tendency, at all 
 events, of that policy. And judged by this standard, 
 Protection must tend to concentrate its energies upon 
 multitudinous branches of local production, and, in 
 comparison, to underrate its Foreign Trade. 
 
 On the other hand, a Free Trade community will 
 only pay such particular attention to its current pro-
 
 The Trade Policy of Federation. 55 
 
 duction as its individual, natural and other advantages 
 may seem to suggest. It is under no sort of obliga- 
 tion to produce everything which it consumes. It 
 will, indeed, not attempt to produce anything which 
 it cannot turn out at a minimum cost. It views the 
 whole earth as productively its own. It cares nothing 
 where commodities come from. It knows but one 
 rule for production : " Make the best use of natural 
 advantages." If it can most profitably produce raw 
 material, it will produce raw material ; if it can most 
 profitably manufacture, it will manufacture. If it can, 
 to a certain extent, profitably do both, it will, to that 
 extent, do both. 
 
 (II.) Excess of profitable production over local con- 
 sumption. — The word " profitable " at once puts 
 Protection out of court so far as this factor is con- 
 cerned. Protection produces everything at a loss, 
 judged by the value of the things produced in the 
 world's markets, as compared with the cost of their 
 production. Were it otherwise, there would be no 
 necessity to exclude foreign competition. Therefore, 
 the greater the excess of local production over local 
 requirements, the greater the loss ; which proves 
 once more, and by a different road, a previously 
 connoted fact, wk, that overproduction is the Nemesis 
 of Protection. 
 
 To Free Trade this excess means the stock avail-
 
 56 The Trade Policy of Federation. 
 
 able for purposes of exchange, and is, therefore, the 
 backbone of the system. What that stock may con- 
 sist of, whether of raw material, or of manufactured 
 goods, or of both, will, of course, once more depend 
 upon the special producing advantages enjoyed by 
 each Free Trade community. But raw, or manu- 
 factured, or both, the surplus represents that portion 
 of the national wealth devoted to the purpose of 
 securing, at the cheapest cost, those commodities 
 which the communit}^ cannot itself produce at a 
 minimum expense. And hence, the greater the 
 excess of profitable local production over local re- 
 quirements, the greater the quantity of foreign produce 
 which will be secured. 
 
 (III.) Facilities enjoyed for finding a market abroad 
 for this excess of A 'jfitable production ; that is, the 
 weans of carrying on a Foreign Trade. — It may be 
 objected that, if our position is sound, and if Pro- 
 tective production be really, as well as apparently, a 
 losing game (even though possibly, for national 
 reasons, justifiable upon the score of expediency). 
 Protective nations would soon abandon Foreign 
 Trade altogether, and that most certainly they would 
 never be such fools as to encourage locally-owned 
 foreign-going shipping to their own disadvantage. 
 This objection would have some force if it could also 
 be shown that Protective communities understand the
 
 The Trade Policy of Federation. 5 7 
 
 real drift of their policy. But they do not, because 
 the fallacies of Protection do not lie upon the surface, 
 because it is the most plausible fraud that ever 
 blinded men's better judgment. The unthinking, 
 long-suffering " protected " many are the victims of 
 the keen-sighted protected few. The protected manu- 
 facturer often makes " his pile " out of goods for 
 which the " protected " consumer pays twice their 
 value. It matters nothing to the manufacturer that 
 the community as a whole is losing, so long as he can 
 feather his own nest. He may even, under the 
 mantle of Protection, produce to such advantage in 
 special lines, as to be able to compete in Free Trade 
 markets, and still enjoy Protection at home ! There is 
 absolutely no limit to the public blindness if only 
 sufficient dust be thrown in its eyes, and patriotism 
 is a caster which holds a lot of dust. But the really 
 fatal flaw in the above objection is, that it seeks to 
 disprove by a reductio ad absiirdnm, what really takes 
 place. The conclusions to which common-sense 
 analysis of cause and effect points are abundantly 
 confirmed by statistics. Four-fifths of the inter- 
 national trade of the world is carried in Free Trade 
 bottoms. If we take particular instances, the matter 
 assumes a still clearer aspect. Eighty-three per cent, 
 of the international commerce of the United States is 
 carried on in Free Trade ships. Or, to take a
 
 58 The Trade Policy of Federation. 
 
 Colonial example, whereas Victoria, before she adopted 
 Protection, owned three times as much shipping as 
 New South Wales, New South Wales now owns 
 more than twice as much shipping as Victoria. Or, 
 if we glance at the register of Free Trade England, 
 we find figures which almost challenge belief. The 
 Foreign Trade alone of England, exclusive altogether 
 of her vast local coasting-trade, employs British 
 vessels with an aggregate burden of 10,241,856 tons ! 
 Now, hereby hangs a tale. The profits of the carry- 
 ing Trade are enormous, the mere ship-building in- 
 dustry is enormous, the number of men employed both 
 to make and to work these ships is enormous, every- 
 thing in any way connected with shipping is upon an 
 enormous scale. Of these advantages Free Trade has 
 practically a mo:v5>poly, a monopoly not of her own 
 seeking or due to any superior enterprise of Free 
 Trade communities, but because hers is essentially a 
 Trade policy. The Americans are proverbially cute 
 and " go ahead." Yet, their foreign-going shipping is 
 but a fraction of England's, and much even of that 
 has to " cadge " for freights in Free Trade ports. So 
 also their Foreign Trade is but a fraction of Eng- 
 land's.^ And all who imitate their policy must be 
 prepared like them to see their Foreign Trade become 
 a merely subsidiary item of their national wealth. 
 ^ See appendix note on Foreign Trade.
 
 The Trade Policy of Federation. 59 
 
 (IV.) The acciimulatio7i of the results of past pro- 
 duction, home and foreign. — Both sorts, of course, 
 represent wealth, but whereas under Protection the 
 increment is synonymous with over-production and 
 stagnation for want of a natural outlet — a sort of 
 productive white elephant, — under Free Trade it 
 simply means temporary withdrawal of capital from 
 a particular industry, or industries, until the accumu- 
 lation shall have been dispersed through Trade. The 
 difference between an overflowing cistern with a 
 choked plug-hole and a full cistern with a clear 'scape- 
 pipe is sufficiently obvious, especially if the former is 
 supplied from a tap that cannot be turned off. 
 
 (V.) Capital invested in 2inproductive property. — 
 Under this category will of course come plate, 
 jewellery, pictures, furniture, yachts, race-horses, and 
 the thousand and one other luxuries of civilised life. 
 All this capital is of course practically idle from a 
 productive point of view ; but it exists, it is always 
 available at a national pinch, and cannot therefore be 
 overlooked. What chiefly concerns us at present is 
 the reflection that, cceteris paribus, the more cheaply 
 a community obtains its necessaries, the more it will 
 have to expend upon luxuries (so obnoxious to the 
 dismal school) that help to make life "worth living." 
 Free Trade communities have evidently a decided 
 advantage here. What say figures ? They are
 
 6o The Trade Policy of Federation. 
 
 simply powerless to give us an adequate idea of the 
 unused wealth of Free Trade England. The ac- 
 cumulation of plate alone is upon a scale almost 
 fabulous. The royal collection represents three and 
 a half millions sterling. It has been estimated, upon 
 such information as could be obtained, that the total 
 value of the gold and silver sunk in the form of 
 " plate " in the United Kingdom exceeds one hundred 
 million pounds sterling ! Of the value of the jewellery 
 from the regalia to the workman's watch, not even an 
 approximation has yet been made. So of the other 
 items. They must represent many hundreds of 
 millions. America is by comparison hopelessly in 
 the rear. She can, indeed, point to a few millionaires 
 (Protection is a regular nursery for the few) who, in 
 her own expressive vJiom, " make things hum " in the 
 way of costly magnificence. But by the time her 
 people have paid "through the nose "for their Pro- 
 tected commodities, they cannot afford to let much of 
 their capital lie idle. 
 
 (VI.) National Credit. — This is a factor which may 
 be either of the very gravest importance or of com- 
 parative insignificance, according to the actual 
 financial requirements of particular communities, 
 depending, in fact, upon the necessity, or absence of 
 necessity, of borrowing foreign capital. Neither Pro- 
 tected America nor Free Trade England, for example
 
 The Trade Policy of Federation. 6i 
 
 requires foreign assistance. If, owing to any unfore- 
 seen emergency, money is wanted for national pur- 
 poses, it can at once be obtained in New York or in 
 London. But certain other communities are not so 
 independent. They are always wanting money, and, 
 as the London Stock Exchange knows pretty well, 
 they are not at all backward in asking for it. Now, 
 as all hard-up communities apply, with unfailing 
 regularity, to the same source, a certain amount of 
 competition is engendered. John Bull lends very 
 freely ; he is fond of lending when he sees (or thinks 
 he sees) decent security and good interest. In times 
 gone-by he has sometimes allowed himself to look 
 too lovingly at the interest and not critically enough 
 at the security. Most of the States of South America 
 have bled him horribly. He would be glad to have 
 all the money he has lent to Argentina, and Turkey, 
 and Egypt safe back in his coffers. He is getting 
 more careful. He is making up his mind very fast 
 to leave Mexico severely alone, and invest his savings 
 in his own colonies. Australasia is just now a prime 
 favourite. The alacrity with which loan after loan 
 is subscribed for amazes even agents-general. One 
 hundred and sixty-three millions have already found 
 their way out there in the shape of loans, and appar- 
 ently as much more could be had for the asking. But 
 appearances are proverbially deceptive, and national
 
 62 The Trade Policy of Federation. 
 
 credit is a very ticklish affair. Once let a country- 
 show symptoms of radical unsoundness, and that 
 country's credit sinks like a stone. John Bull is a 
 thorough believer in Free Trade. By its means he 
 has become what he is— a head and shoulders finan- 
 cially taller than any one else. He utterly loathes 
 Protection, because he holds it to be rotten to the 
 core, and because it hampers his Trade. He cannot, 
 indeed, well deny that America has got on very well 
 under Protection ; but, from his point of view, she 
 has done so in spite of Protection ; and he chuckles 
 when he compares his trade and his shipping with 
 hers. Moreover, America has no political connection 
 with him, and does not often come to him for loans, 
 and so her policy he has no business to criticise. But 
 with his own colonics the case is very different. He 
 does not assume a right to dictate what policy they 
 shall pursue ; but he has no sympathy with those 
 who repudiate his policy. So long, indeed, as a 
 Protective colony can manage to pay interest on 
 previous loans, he does not refuse further advances ; 
 he lends, marvelling the while at the borrower's 
 wrongheadedness. But once let such a colony get 
 into serious monetary troubles, and that colony is 
 financially damned. J. B., as a Free Trader, will 
 attribute the disasters to Protection, and button up 
 his pockets. To a Free Trade colony he cannot but
 
 The Trade Policy of Federation. 63 
 
 be more indulgent. Nothing short of absolute 
 national bankruptcy would shake his confidence in 
 Free Trade New South Wales. He saw her a year ago 
 with a large deficit and apparently very hard-pushed, 
 and he subscribed for her five and a half million loan 
 many times over, at lowest current rates. Why ? 
 Simply because she is his pet ; her policy is his 
 policy, and that policy, in his eyes, cannot mislead. 
 Could Victoria, after showing a budget deficiency of 
 over a million, expect similar favour ? The whole 
 affair is so very plain : does not every creditor like 
 to feel secure that his debtor's business is worked 
 upon a sound basis? And what is true of national 
 credit, as affecting national borrowing-power, is true, 
 in a still more marked degree, of private enterprise. 
 English capital must, in the long run, be principally 
 drawn to those countries which model their policy 
 upon English lines. And when we come to reflect 
 that the Colonies are, to a very large measure, depen- 
 dent upon borrowed capital, the importance of a 
 policy which shall attract that capital freely presents 
 itself in very strong colours indeed. 
 
 (VII.) TJie precious metals used as exchange- 
 medium. — A very marked and distinct factor of 
 national wealth, which Protection professes to esteem 
 very lightly, preferring to make use of a fictitious 
 currency. The idea is (and a thoroughly Protection-
 
 64 The Trade Policy of Federation. 
 
 ist idea it is) to obviate the necessity of an expensive 
 and rapidly wearing-out coinage by substituting 
 Government guaranteed paper money. It is not a 
 new idea ; it has been put forward over and over 
 again, especially by the " three-acres-and-a-cow-per- 
 man " class of social reformers. It has, like most 
 demagogue solutions of economic problems, the merit 
 of extreme simplicity. When " hard times " come, 
 cannot Government issue plenty of paper money and 
 make every one's heart glad ? The ludicrous ab- 
 surdity of thus endowing a Government with the 
 supernatural power of imparting intrinsic value to 
 scraps of paper, which are not promises to pay, on 
 demand, in coin value, need not here be dwelt upon. 
 Those who have never given the question of Exchange 
 any particular attention will find an appendix note ^ 
 to guide them in fixing their ideas. Our immediate 
 business is to point out that Free Trade distinctly 
 recognises the necessity of having an intrinsically 
 valuable coinage and a standard as far removed as 
 possible from serious fluctuations in value. The 
 English coinage is such a coinage, and the English 
 " sovereign " is such a standard — a standard typical 
 of the wealth-supremacy of Free Trade England. 
 
 The preceding paragraphs have treated the question 
 of " advantage " from a purely £ s. d. point of view. 
 ^ See appendix note on Exchange.
 
 The Trade Policy of Federation. 65 
 
 But it may, on the other hand, be regarded from the 
 American standpoint — as a matter of national fceHng, 
 of patriotism. It then, of course, passes beyond the 
 province of argument altogether, and into the realms 
 of sentiment. Independent nationality, even with 
 small beginnings, may to some seem the noblest ex- 
 pression of Australasian or Canadian ambition. But 
 how does it appear to the majority of Australasians 
 and Canadians ? Is the game of future greatness 
 worth the candle of present loss ? The voice of the 
 Australasian and Canadian peoples can alone answer 
 the question. If that voice answers in the affirmative, 
 if nothing short of absolute independence will satisfy 
 Colonial aspirations, then Protection, with all its 
 radical defects, its inherent unsoundness, steps into 
 the arena clothed in the invulnerable armour of 
 expediency, against which not even Free Trade can 
 prevail; history simply repeats itself; the United 
 States of Australasia and of Canada have the same 
 future before them as had the United States of 
 America one hundred and fourteen years ago. 
 
 4. Can any alternative course be indicated offering 
 greater immediate or future advantages ? 
 
 Yes, both immediate and future ; and that course 
 is — Federal Union with England. Let but the 
 Colonies decide, and give open expression to the
 
 66 The Trade Policy of Federation. 
 
 decision, that it is NOT a nobler ambition to erase the 
 glorious old name "British" from the national records 
 and become an ethnological Olla Podrida than to 
 retain the race ties of blood and kinship and become 
 States of the Britannic Confederation — let them but 
 do this, and the great problem will be solved. Public 
 opinion both in England and in the Colonies has 
 decided, in very pronounced tones, that the present 
 disjointed, incoherent condition of the Empire must 
 forthwith be remodelled. The wisest heads in 
 England have, for some time past, been trying to 
 discover how this reform may best be effected, but no 
 plan acceptable to all concerned has as yet been 
 formulated. Colonial agents-general (who, by the 
 way, ought to have '' Ne sutor ultra Crepidam" tacked 
 on to their K.CM.G. brevets, or they will soon 
 blossom forth as ministers-plenipotentiary) have been 
 simply begging the real question by feeble sugges- 
 tions about Imperial-manned, Colonial-paid squadrons 
 and other trivialities. The subject of Federation has 
 been, and is, receiving the most careful attention from 
 English statesmen, from the English press, and from 
 the English public. The only conclusion so far 
 arrived at has been that Federation proposals must 
 come from the Colonies to England and not from 
 England to the Colonies ' 
 
 Now, there must be some reason for this seeming
 
 The Trade Policy of Federation. 67 
 
 inability of English brain-power to solve a problem 
 which, though certainly difficult, is also certainly very 
 far from being insuperable. Where is the stumbling- 
 block? Inability to formulate a merely technical 
 scheme ? Surely not ; any clerk in the Colonial 
 office could do that. The " Irish difficulty? " Then 
 why not embody it in the solution ? The most pro- 
 bable explanation would seem to be in the fact that 
 England and the Colonies are at variance upon the 
 question of Commercial Policy. England hitherto 
 has been definitely, wholly pledged to Free Trade ; 
 her commercial supremacy has depended upon it. 
 Most of the Colonies are trying to " play upon their 
 own hands" (more Americano), and are steeped in 
 Protection. Now, if Federation of the Empire is to 
 be effected at all, it must be thorough, and it must be 
 based upon three things : 
 
 (I.) Local self-government of all Federal States. 
 
 (II.) Representation of these States in a central Im- 
 perial Parliament. 
 
 (III.) Unity of commercial polity. 
 
 The first practically exists already. The second 
 merely needs a royal warrant to spring into existence. 
 The third has been, and still is, the real stumbling- 
 block. 
 
 And here for the moment we pause. We have 
 glanced at the rival systems from almost every
 
 68 The Trade Policy of Fede7''ation. 
 
 possible aspect, and we have found that Free Trade 
 everywhere emerges triumphant. But we have also 
 seen that, although always the soundest, it is not 
 always the most expedient policy. We have here- 
 after, therefore, to see whether or not it would be the 
 expedient policy for a Britannic Confederation. And 
 this will form the subject of discussion throughout 
 the Empire for perhaps many years to come.
 
 APPENDIX NOTES.
 
 "FAIR TRADE." 
 
 THE MILLER AND THE BAKERS : A FABLE. 
 
 There once lived a miller, named Protection, looked upon 
 by his own family as a model father, but spoken of by 
 strangers as a selfish, grasping sort of fellow, who would, 
 any-day, rather waste time and spoil good leather trying to 
 make himself a pair of boots, than buy them in a shop. At 
 some distance from the mill resided two bakers. Free Trade 
 and Fair Trade, who had been in the habit for years of 
 getting most of their flour from Protection, although the 
 covetous miller tried hard to do all his own baking at home, 
 and seldom bought so much as a biscuit from either of his 
 customers. One day both bakers called on him to remon- 
 strate with him upon his selfishness. He heard all they had 
 to say, did not deny that his home-made bread was neither 
 so good nor so cheaply made as their bread, but absolutely 
 refused to alter his tactics. " If you like," he said, " to buy 
 my surplus flour, you can ; if not, you can leave it alone. 
 I'm not dependent upon the mill for a living; and I tell you 
 straight that I'd rather pay dear for home-made bread than 
 cheap for your bread. I have a fancy for home-made bread. . . . 
 
 I want my family to learn how to make bread there 
 
 may be a smash-up amongst you bakers some day, and I 
 may have to rely on my own ovens altogether. Suppose 
 any reasons you like, but take my answer — No." Where- 
 
 71
 
 72 ' * Fa ir Trade. 
 
 upcn Fair Trade got very red in the face and answered 
 hotly, " Then if you won't buy my bread, I'll not buy your 
 flour. There are plenty of other millers in the world. 
 They can't perhaps sell quite so cheaply as you, but they're 
 not such selfish brutes. And I've made up my mind for the 
 future to buy only from those who buy from me ! " And 
 Fair Trade went away highly exasperated. "Well," said 
 Protection to Free Trade, somewhat anxiously, though he 
 tried to look unconcerned, ''what are yoii going to do? 
 Boycott my flour too?" "Not I!" replied Free Trade. 
 " As we say in my trade, ' half a loaf is better than no bread.' 
 You do your best to take half my trade loaf from me by 
 refusing me your custom ; but you must, for your own sake, 
 leave me the other half — your supply of flour. Do you 
 suppose I'm such a fool as to refuse Jialf a good thing be- 
 cause I can't get the w/iolc? I repeat, miller, that your 
 jack-of-all-trades notions are simply absurd. As a man of 
 sense, not to say as a baker, it seems to me rank insanity to 
 turn out home-made rubbish for 8d. which you could buy, 
 best quality, for 5d. But that's your loss chiefly. As for 
 me, I will buy my flour from you so long as you can under- 
 sell other millers. If at any time you require a cake, or 
 biscuits, or even a decently-made loaf, don't forget that I'm the 
 best and cheapest baker in the world. Good-day." "Yah!" 
 roared the miller, much incensed at this parting shot. 
 "You'll buy from me because you can't supply your own 
 flour; no thanks \.o you!" "None whatever," returned 
 Free Trade, cheerily, as he disappeared down the street.
 
 Fair Traded y2> 
 
 " Don't forget the address ! " And thus it came to pass that 
 baker Fair Trade did a small mutual back-scratching business 
 and gratified his anger against the miller, while Free Trade 
 did a roaring commerce with the whole world. 
 
 The moral of this little fable is very obvious. In what- 
 ever light we may choose to regard Fair Trade as a question 
 of sentiment, as a pure matter of business it has not a leg to 
 stand upon, except Hike its first-cousin, Protection) ex- 
 pediency. Moreover, it could only be justified, even from 
 motives of expediency, as a poiverful lever to tiproot Pro- 
 tection ; and it would have to be adopted by a large number 
 of widely-scattered, widely-producing communities^ else 
 supplies of raw material would be utterly inadequate. It 
 might, for example, be deemed expedient for all States and 
 Dependencies of the Britannic Confederation to adopt Fair 
 Trade tactics in their dealings with foreign nations. Such 
 a course, although it would entail present loss upon British 
 States proportionate to the inabihty of even our well- 
 distributed Empire to supply all commodities at a minimum 
 cost, would, on the other hand, compel Protectionist nations 
 either to open their ports or abandon foreign trade altogether. 
 It would then become merely a question of time how long 
 Protection could be bolstered up. Of the ultimate result 
 there can be no conceivable doubt. Whether the final 
 triumph of Free Trade would be cheaply purchased at a 
 temporary productive loss it would be for the Confederate 
 States to determine. Fair Trade, upon a small scale, is too 
 ludicrous for serious comment.
 
 HENRY GEORGE ON FREE TRADE. 
 
 The name of Henry George carries weight with the 
 masses, and not undeservedly, for he is a conscientious and 
 very persistent advocate of what he believes to be their best 
 interests. Like Cobden, a self-made, self-taught man, he 
 possesses, also like Cobden, great natural clearness of per- 
 ception and fluency of expression. Unfortunately, once 
 more like Cobden, he has a hobby ; and, just as the 
 " Apostle of Free Trade " could not return thanks after an 
 agricultural dinner without introducing a stray slap or two 
 at his pet aversion — national armaments, so, too, Mr. George 
 never misses an opportunity of dragging his bugbear — un- 
 even division and tenure of land — into every subject which 
 he approaches. " National armaments," thundered Cobden, 
 " are a wicked waste of national wealth, an exhausting drain 
 upon the resources of the nation : therefore national arma- 
 ments ought to be abolished." " The existing systems of 
 land tenure," argues Mr. George, '^ are the causes of all 
 social troubles ; they are based upon principles utterly 
 inconsistent with natural right : therefore they ought to be 
 swept away." Mr. George is perfectly right, as was also 
 Mr. Cobden, — theoretically. His position is quite unassail- 
 able judged by the standard of right and wrong. But he is 
 not satisfied with theoretical accuracy ; he hammers away 
 unceasingly at a right which no one denies : whereby he 
 becomes insufferably wearisome, and ends by running his 
 
 74
 
 Henry George on Free Trade. 75 
 
 head against the stone wall called expediency. No sane 
 man nowadays disputes that nine-tenths of all civilised in- 
 stitutions are radically at variance with natural right. 
 Tenure of land is merely one instance out of thousands. 
 Of what use can it be to write volume after volume in proof 
 of a self-evident truth ? Mr. Henry George has, so far, 
 persistently committed the grave error of leaving off where 
 he ought to begin ; this eternal ^' slaying the corpse " of 
 natural right is quite unworthy a prophet of his pretensions. 
 If he would direct his attacks against his live enemy, ex- 
 pediency, he would at least save much valuable time. His 
 latest work upon Free Trade is a repetition of the old 
 song, in a different key. His naturally acute perceptions 
 enable him vividly to realise the intrinsic excellence of 
 Free Trade, although, as he confesses, he commenced his 
 investigations with strong Protective prejudices. Indeed, he 
 goes so far as to deny to Protection the one claim which, 
 from our point of view, it may be said to possess in the 
 case of the United States — expediency. 
 
 " In the early days of the American Republic, when the 
 friends of Protection were trying to ingraft it upon the 
 Federal revenue system, Protection was asked, not for the 
 maintenance of American industry, but for the establishment 
 of * infant industries,' which, it was asserted, would, if en- 
 couraged for a io.'N years, be able to take care of themselves. 
 The infant boys and girls of that time have grown to 
 maturity, become old men and women, and with rare excep- 
 tions have passed away. The nation then fringing the
 
 76 Henry George on Free Trade. 
 
 Atlantic seaboard has extended across the continent, and 
 instead of four million now numbers nearly sixty million 
 people. But the * infant industries/ for which a little 
 temporary Protection was then timidly asked, are still 
 infants in their desire for encouragement* Though they 
 have grown mightily, they claim the benefits of the * Baby 
 Act ' all the more lustily, declaring that if they cannot have 
 far higher Protection than at the beginning they dreamed of 
 asking, they must perish outright. . . . When we are 
 told that two generations should tax themselves to establish 
 an industry for a third, well may we ask, ' What has posterity 
 ever done for us ? ' " 
 
 Mr. George being himself an American, his opinion upon 
 this point is of interest ; but how far is his opinion a gauge 
 of American sentiment generally? Judging from the im- 
 mense popularity of the writer, we make no doubt that Mr. 
 George's work will have proved to be a powerful contribution 
 to the cause of Free Trade, thougli we are convinced that 
 nothing short of Imperial Federal reciprocity will ever con- 
 vert the United States. But we learn without surprise that, 
 ably as the subject has been handled, it is used mainly as a 
 peg whereon to hang reiterated denunciations of land tenure. 
 Beggars on horseback have not a monopoly of reckless 
 riding. Mount an enthusiast on his hobby, and he will ride 
 it at anything. There is, however, comfort in the reflection 
 that those who may be convinced by Mr. George's argu- 
 ments of the inherent superiority of Free Trade over 
 Protection are not compelled to follow him in his agrarian 
 deviations.
 
 FOREIGN TRADE. 
 
 That Protection is in its very nature destructive to 
 Foreign Trade has, it is hoped, been made sufficiently clear. 
 The subjoined returns are appended rather to illustrate 
 than to confirm the inevitable results of a Protective policy. 
 The statistics are for 18S9. 
 
 States. 
 
 Population. 
 
 Total Trade. 
 
 Average 
 per head. 
 
 United Khigdom* 
 
 38,910,000 
 
 ^1742,343,336 
 
 .^I9"i 
 
 United States 
 
 62,480,540 
 
 326,920,745 
 
 5-2 
 
 New South Wales* 
 
 I, I J 2,000 
 
 46,157,991 
 
 41 
 
 Canada 
 
 5,200,000 
 
 42,002,877 
 
 8 
 
 Victoria 
 
 1,104,288 
 
 40,825,937 
 
 36 
 
 France 
 
 38,218,903 
 
 311,343,880 
 
 8-1 
 
 Germany 
 
 47,650,806 
 
 351,086,350 
 
 7-3 
 
 Austria-Hungary 
 
 41,827,700 
 
 104,870,000 
 
 2-5 
 
 Straits Settlements* 
 
 568,000 
 
 57,883,668 
 
 IOI7 
 
 Italy 
 
 30, 1 20,000 
 
 88,345,673 
 
 2-9 
 
 Channel Islands* 
 
 90,310 
 
 4,588,595 
 
 55 
 
 Free Trade ; all the others Protectionist. 
 
 Figures certainly strip Protection rather bare. One hears 
 a vast deal about Yankee smartness, push, enterprise, and so 
 forth, but what about the Yankee Trade average? Cer- 
 tainly no one who has any knowledge of Americans will 
 question the justice of their claim to the brilliant business 
 qualities generally ascribed to them. One meets them 
 
 77
 
 yS Foreign Trade. 
 
 everywhere. Their agents scour the world. Their fertility 
 of resource, their indefatigable efforts to push their trade 
 abroad, have become proverbial. And the result ? ;^5 4s. 
 per head. How pregnant of meaning are those two figures. 
 Wliat a tale they tell of the powerlessness of even the most 
 strenuous efforts to withstand the destructive torrent of Pro- 
 tection ! In the case of the apparently enormous Trade 
 average of the Straits Settlements, it is only fair to point out 
 that the figures must not be regarded from the same point 
 of view as those of the other countries. Singapore, for in- 
 stance, is really a large depot for a considerable portion of 
 the Eastern trade, and its profits are chiefly those of agents 
 or middlemen, not those of producers. Still the fact re- 
 mains that ^57,883,673 worth of Trade passed in 1884 
 through the hands of the Straits people, because they have 
 the good sense to keep their ports open — so very wide open, 
 indeed, that they levy duty 2ip07i nothing. The splendid dis- 
 play made by the Straits in the Indian and Colonial Ex- 
 hibition has frequently been mentioned by the London 
 correspondents of leading Colonial journals in terms of 
 wonder. Has it occurred to these gentlemen that the 
 Colony in question shows larger Trade returns than any 
 other British possession, except India ? And this means a 
 great deal, even making all due allowance for the special 
 character of the Trade. 
 
 The returns of the other alien nations require Httle com- 
 ment. It may be remarked that the countries enumerated 
 have (excepting Austria-Hungary) plenty of sea-board : in
 
 Foreign Trade. 79 
 
 land places, being under natural Trade disadvantages, have 
 been purposely omitted. The large returns of Victoria 
 and New South Wales point to the immense importajice of 
 their foreign trade to both Colonies, in the first place ; and, 
 further, suggest a very leading question. How comes it; in 
 the face of the asserted tendency of Protection to destroy 
 Trade, that Victoria's average not alone vastly exceeds that 
 of the United States, but comes such a very respectable 
 second to that of New South Wales ? The answer is as 
 simple as our limits compel it to be short. Victoria can no 
 more become like the United States commercially than 
 could our bull frog physically rival the ox ; she can?iot live 
 without Trade. She may, indeed, like the United States, 
 place herself at great Trade disadvantage, but she cannot, 
 like the United States, be practically independent of other 
 nations and afford to regard her Trade as a merely secondary 
 consideration. A wealthy man with a craze may, if he 
 likes, feed his cows upon green peas and cucumbers, and 
 churn very dear butter. But what of the dairyman who 
 imitates the example ? He must sell butter — or close his 
 dairy. But where are his profits, after his expensivtly- 
 produced article has been sold in the open market? Are 
 his home-slopped clothes and his home-cobbled boots a 
 satisfactory set-off? One can understand an American 
 chuckling over even his little ^^ 4s. average, because, small 
 as it is, more than half of it is export — an important con- 
 sideration, under Protection. But what about Victoria ? She 
 is avowedly only buying what she can^t make, and she is
 
 So Foreig^n Trade. 
 
 selling less than she buys. Her '• protected " children are 
 therefore paying the maximum price for home-made goods, 
 paying ditto for imported goods, getting only Free Trade 
 prices for their exports^ and paying heavy taxes besides ! 
 Surely the cause for wonderment is, not that she shows re- 
 spectable total Trade returns — she imist do that at any cost; 
 but that she should be content to sacrifice her Trade profits 
 at the shrine of her fetish. Better surely, if she will have 
 Protection, follow America and be content with the Ameri- 
 can average, than drift to ruin upon a losing trade. It's 
 easily done. Let her crajn on more Protection. The result 
 will speedily be to make it plain to all that she cannot stand 
 alone, like her great model. And once it is made plain that 
 no one Colony can dispense with Trade, it may then dawn 
 upon the brains of even Protective enthusiasts that arti- 
 ficially bolstered-up, extravagant production is, and eternally 
 must be, synonymous with commercial loss.
 
 MANUFACTURES. 
 
 The strongest supporters of Protection are naturally those 
 who, through its means, enjoy the lion's share of pro- 
 ductive monopoly; that is, the manufacturers and their 
 employes. One may therefore be led to inquire what 
 proportion these favoured individuals bear to the total 
 population ; and, fortunately, we have some statistics to 
 enlighten us. 
 
 AMERICAN PROTECTED MANUFACTURES IN 1876-1886. 
 
 1876 18S6 
 
 Number of establishments 252,148 -53,852 
 
 Capital i;338,9i3,4o3 ^558,054,521 
 
 Hands employed 2,053,996 2,732,595 
 
 Value of materials -^398,148,358 ;^679,364,7io 
 
 Value of products 1 £677,172,070 ^1,073,915,838 
 
 Now more than one-half of the establishments and of the 
 capital, and nearly two-thirds of the workmen are in the 
 States of New York, Pennsylvania, Ohio, Mass, Illinois, 
 Indiana, and Michigan. This leaves the balance to be 
 distributed among the thirty-one other States and eight 
 territories of the Union. It was the monstrous monopoly 
 
 ^ Local value, of course, not Trade value. In Free Trade 
 markets the average value would be 2)2) per cent, at least, less, 
 z.?., the wasted cost of Protected production. 
 
 81 F
 
 82 Mamifadures. 
 
 that, as already noted, led to the secession of the Southern 
 States. But apart from this, if we even supposed the manu- 
 factures to be fairly distributed, we find a still more glaring 
 injustice in front of us. In 1876 the population of the 
 United States amounted to 48,558,371, and every man, 
 woman, and child of this number was paying exorbitant 
 prices for commodities in O'-der that two millions of persons 
 might be permitted to charge their own rates. Ten years 
 later the population had swollen to 56,155,783 souls, the 
 " Protected " class to 2,732,595. The present population 
 is estimated at 63,000,000 ; the operatives have not, even 
 on paper, yet reached 3,000,000, while, of their real num- 
 ber, 370,000 are a.ctually out of employment. The objection 
 that to the number of operatives must also be added the 
 women and children dependent on them is pointless, 
 because even this addition would only result in a small 
 fraction of the total population, and all are paying Pro- 
 tection rates, including the operatives themselves. The 
 whole affair is utterly past argument. If the American 
 people, the sixty odd millions of consumers, could, by some 
 miracle, be made to understand the figures we have quoted. 
 Protection would be thrown where the Protected tea was 
 thrown in 1773 — into Boston harbour. 
 
 An organ of the party which relies upon farmers' votes to 
 sustain its policy of Protection (says the Boston Herald) 
 admits that, " at the present price of wheat in Chicago, an 
 ordinary western farmer cannot make a dollar a day raising 
 it." The ordinary farmer cannot escape, however, paying a
 
 Manufactures. ^2i 
 
 tariff tax averaging 46 per cent, upon his imported necessi- 
 ties. He pays 55 per cent, upon plain white earthenware, 
 65 per cent, upon window glass, 40 per cent, upon bags of 
 bagging, 45 per cent, upon machinery and all manufactures of 
 iron and steel, 35 percent, upon matches, from 37 to 81 per 
 cent, upon salt, 54 per cent, upon sugar, 2 dollars per 1,000 
 feet for boards and lumber, and an average of 66 per cent, 
 upon the manufactures of wool used in his family. Truly 
 "the farmer pays for all," and precious little does he get in 
 return from " the highest tariff in the world." 
 
 Victoria, in her little bull-frog fashion, is trying hard to 
 follow suit. This is how her manufactures stood in 1884 : 
 
 Establishments, great and small, 2,856 
 
 Number of hands employed, 49)373 
 
 C«///(2/ (lands, buildings, machinery, and plant), ^10,199,918 
 
 Of the value of the manufactured products we can find 
 no reliable returns. A Victorian estimate places it at 
 j^i 5,000, 000, and as this approximates to the American 
 ratio, it is perhaps nearly correct; though, of course, 
 ;^i 5,000,000 worth of Victorian protected goods would 
 " go at an alarming sacrifice " in Free Trade markets, and 
 have therefore a very fictitious value. But let that pass. 
 The population of the Colony in December 1884 was 
 961,276. We have therefore once more the overwhelming 
 majority sacrificed to the theoretical (and utterly mistaken) 
 advantage of the minority. Nay, in the case of Victoria 
 the tyranny is intensified by the fact that all but a small
 
 84 Manufactures. 3 
 
 fractional portion of the manufacturing interest is centred 
 in one town — Melbourne. And yet the unthinking, hood- 
 winked hundreds of thousands of Victorian consumers allow 
 themselves to be persuaded that they are in the very van- 
 guard of industrial progress ! A trade which, crippled as 
 it is, and forced, as it is, into the most 2aiprofitablc cha)i?iels, 
 by Protection, still totals ^^40.825, 937 fer anmun, a trade 
 which, under Free Trade, would double ^ itself in a few 
 years and upon profitable lines, strangled in order to bolster up 
 ruinous " industries " which represent, even nominally, but 
 ten millions of pounds, and are not, intrinsically, worth half 
 the money ! 
 
 '^ We use the word " double " advisedly. If Victoria adopted 
 a Free Trade policy, the other Protective Colonies would follow 
 suit, and the general Trade would increase, not by slow degrees; 
 but by leaps and bounds. And a Free Trade Australia would 
 assuredly go far to convert Protectionist Canada.
 
 EXCHANGE AND CURRENCY. 
 
 Exchange is the term applied in commerce to those trans- 
 actions, the technical details of which we need not enter 
 into, by whicli the debts of individuals, residing at a dis- 
 tance from one another, are settled, without the necessity of 
 remitting specie. Evidently the trade between any two 
 communities, representing the aggregate of individual liabil- 
 ities, will not, if estimated for a fixed period, exactly 
 balance; there will be a surplu owing from one to the 
 other. This used, years ago, to be expressed by saying 
 that the balance of trade was in favour of the one and 
 against the other, that country being regarded as best off 
 which exported more than it imported. It was further 
 held to be an incontrovertible axiom that if the country 
 which had the " balance " against it could not show im- 
 ported specie to make up the deficiency, that country was 
 in a bad way. This primitive way of regarding trade, 
 especially the mysterious excellence attached to specie, 
 survives now in the imaginations only of a few " Faddists." 
 The law is now thoroughly well established by experience 
 that Exchange tends to Equilibrium ; indeed, when the 
 exchange is really most favourable to a country, the tend- 
 ency is to increase that coiaitry's t?nportation in order to re- 
 store equilibrium. This, to the average reader, will not be 
 very obvious, a fact the less to be wondered at inasmuch as 
 
 85
 
 S6 Exchange aitd Currency. 
 
 exchange is, perhaps, the most complicated of all economic 
 subjects. Of this complication Protectionists are not slow 
 to take advantage. They profess to see one point standing 
 out very clearly, namely, that a properly Protected country 
 will buy very little and sell a great deal by closing its ports 
 to imports and exporting its surplus. The rest of the sub- 
 ject is, they say, messed up in the fogs of Free Trade. 
 Ingenious certainly, and superficially plausible, like most 
 Protectionist theories, but fragile as a soap bubble beneath 
 the touch of criticism. 
 
 I. To illustrate the law itself. — The gold produced in 
 Victoria, say during the year 1852, required a certain 
 amount of labour and capital for its production. An equal 
 amount of labour and capital employed, during the same 
 year, upon the production of, say, cotton, in a cotton- 
 growing country, would not show a return equal in value to 
 the Victorian gold. Therefore, temporarily, the equilibrium 
 of exchange would be upset in favour of Victoria, which, we 
 may even suppose, could produce gold with an exchange- 
 value of jQ^ per oz., at a labour-capital outlay of perhaps 
 oi^^y ^i 53. per oz. In the long run, however, according 
 to the law, equiUbrium will be restored ; that is, it will be 
 found that, upon an average, all the gold raised since gold- 
 mining became an industry in Victoria, has cost ;^4 per oz. 
 And even if it can be shown that the gold has cost, upon 
 an average, only ;^3 los. to produce, this fact would by no 
 means contradict the law : it would merely prove that the 
 exchange has been (as regards gold) upon a diminishing 
 
 i
 
 Exchange and Currency. 87 
 
 scale in favour of Victoria ever since ; or, in other words, 
 that equilibrium has not yet been restored, but is tending 
 rapidly towards it. If, on the other hand, gold (or any 
 other product, from Geelong tweed to scented soap) costs 
 more than its exchange-vahie to produce, then the equilibrium 
 is upset against Victoria. It will, of course, tend to right 
 itself if left free and unhampered by artificial restrictions, as 
 naturally as a man dropping from a scaffolding will, by the 
 law of gravitation, fall to the ground. If, however, its 
 efforts towards equilibrium are choked by the continued 
 pressure of the exciting cause of disturbance — Protection — 
 it will, like a man whose descent is arrested by the tighten- 
 ing of a rope round his throat, /ia?ig by the neck till it is dead. 
 2. Statistical returns are no guide whatever to the actual 
 exchange position of a country. — Why not? Because, in the 
 first place, the expenses of transport are added to the 
 estimated value of exports but not to the value of imports. 
 Hence, many nations, with little or no carrying trade of their 
 own, show a nominal excess of export over import-value, 
 which, were the cost of freight deducted, would be reversed. 
 Eighty-three per cent., for instance, of American exports 
 are carried in foreign bottoms (nearly all English), and the 
 real profit to America of these exports is their value after 
 freight has been paid — to English shipowners. So, too, of 
 other nations with whom England has commercial relations. 
 England does by far the greatest portion of the world's 
 carrying trade, and secures carriage profits which neither 
 figure in her Trade returns nor in theirs, but which amount
 
 Exchange and Currency. 
 
 (both ways) to nearly one-third of the gross produce-value. 
 Nominal export-values are further misleading, owing to the 
 fact that they are gauged locally (an absurd exaggeration in 
 the case of Protected countries) and not by their selling or 
 exchanging value, which is not ascertained till some time 
 afterwards. 
 
 3. The whole Export-Import Trade of a country must 
 periodically he balanced. — An insolvent nation may, for a 
 time, import upon credit, just as an insolvent individual 
 may live upon credit, but in the long run both must square 
 up accounts or — face bankruptcy. Hence the well-observed 
 fact that the exporting power of any nation, during a con- 
 siderable consecutive number of years, is an accurate index 
 to its importing power. 
 
 The absurdity of attempting to estimate Trade profits by 
 subtracting imports from exports is pointed perhaps even 
 more forcibly by the case of England than by discounting 
 local exaggerations. The mother of nations seems to be 
 placed above the necessity of even periodically balancing 
 — since her imports always exceed her exports — on paper. 
 A stock argument, this of Protectionists, according to whom 
 England must be simply rushing headlong to national bank- 
 ruptcy. They do not deem it necessary (or advisable) to 
 point out that of English imports nearly ^120,000,000 worth 
 consists of food which could not be produced in England ; 
 that more than the nominal " balance against her " is 
 simply transferred to her shipowners; that her enormous 
 receipts in bullion do not figure in the returns ; and that a
 
 Exchange and Currency. 89 
 
 comparatively small quantity of her exported manufactures 
 represent, owing to increased value^ a large quantity of im- 
 ported raw material in value, thus leaving yearly an enor- 
 mous margin for home consumption, besides a considerable 
 yearly increment to the national wealtli. 
 
 Collating now these various facts upon exchange, we are 
 brought back to the first law that it tends to equilibrium ; 
 that it must in the long run attain equilibrium, unless arti- 
 ficially prevented ; and that the national profit or loss dur- 
 ing the intervals between tending and attainment, can only 
 be estimated by the nation's total trade, tempered by its 
 facilities for cheap production, cheap exchange, and cheap 
 transport. 
 
 The subject of Currency is, so far as British Colonies are 
 concerned, strictly speaking, beyond our present inquiry. It 
 will be sufficient to indicate the strong Protective tendency to 
 discard metallic in favour of forced paper currency. Pieces 
 of locally stamped paper are, it is averred, quite sufficient 
 for purposes of local circulation. The absurdity of attempt- 
 ing by legislation to endow intrinsically worthless pieces of 
 rag (which are not promises to pay on demand in coin) 
 with a nominal value has but too often been made apparent. 
 From the American " greenback " to the Argentine '"' shin 
 plaster " the results of such forced currencies have always 
 been the same — ruinous alike to credit and to Trade. 
 
 END OF APPENDIX.
 
 PART II. 
 THE 
 
 TRADE ECONOMY OF FEDERATION.
 
 THE TRADE ECONOMY OF FEDERATION. 
 
 THE political aspects of Federation lie beyond the 
 scope of the present inquiry, which is based 
 essentially upon Economic considerations ; and, al- 
 though it is difficult to conceive a commercial union 
 which would not also be to a great extent political, the 
 fact is daily becoming more evident that the former 
 must precede the latter. It is true that those who may 
 be termed Political Federationists are not yet generally 
 prepared to admit this ; that many able advocates 
 still contend that political union should come first. 
 But the weight of evidence is against them ; nor do 
 they appear to realise that Mammon is a far stronger 
 stimulus than patriotism to all sections of the British 
 race. Political arguments are based chiefly upon 
 sentiment ; they have been tried, and found wanting. 
 Economic arguments are based entirely upon profit 
 and loss, and are far more likely to succeed. 
 
 It has been shown that Free Trade is a radically 
 sound policy, and that Protection is radically un- 
 sound. And it has been shown that possible expedi- 
 ency, based upon causes underlying national existence, 
 
 93
 
 94 The Trade Economy of Fedei'ation. 
 
 is the one solitary argument that can ever justify a 
 Protectionist policy. Upon these two principles the 
 entire science of Trade Economy is based. Unfor- 
 tunately, however, the Cobden-Bright school of 
 Economists, the founders of England's commercial 
 policy, did not recognise the second of these prin- 
 ciples as a principle at all. With them (as still with 
 their followers) Protection was a rank heresy fore- 
 doomed to be swept away before the true faith of 
 Free Trade. It was part of the faith that was in 
 them ; they predicted from every platform that 
 foreign nations would speedily be converted from the 
 error of their ways and follow England's example. 
 Magna est Veritas et prcEvalebit, was their text. To 
 convert Englishmen by a promise of a "cheap loaf" 
 was an easy task ; and Sir Robert Peel and Parlia- 
 ment, of course, followed suit. But the conversion of 
 the foreigners was left to time, and regarded as a 
 matter of course. Cobden lived long enough to see 
 Free Trade England's accepted policy, the cheap loaf 
 an accomplished fact, and her industries increasing 
 with enormous strides. He died a staunch Free 
 Trader, regretting only that he could not live to see 
 Protection extirpated. Bright died a generation 
 later, not having seen the prophecy fulfilled, and also 
 a Free Trader to the last. He bewailed the perverse 
 obstinacy of foreign nations, but (such is the obstinacy
 
 The Trade Economy of Federation. 95 
 
 of enthusiasm) he neither understood its cause, nor 
 rightly estimated W.?, powers of endurance. Neither do 
 the vast majority of PVee Traders at the present time. 
 Hence, it is of the very utmost importance to inquire 
 most carefully into these two points. 
 
 Why Foreign Nations are Protectionist. 
 
 Great Britain is marked out by Nature as the work- 
 shop of the world. She has vast deposits of coal and 
 iron lying side by side, and these are the very basis of 
 manufacturing enterprise. Geographically, she occu- 
 pies the centre of the land-surface of the earth. Her 
 insular position not only affords her an immunity 
 from attack, which has made it possible for her alone 
 of European nations to dispense with the withering 
 curse of military conscription, but, furthermore, gives 
 her absolutely unrivalled shipping facilities. She had 
 a long start in the industrial race by her inventions 
 of steam and labour-saving machinery. Her vast 
 accumulation of capital, the numbers, energy, and 
 skill of her operatives, have enabled her to reduce the 
 costs of manufactures to a point against which no 
 foreigner can compete in an open market. Omitting 
 the United States (whose reasons for adopting a 
 Protective policy have already been clearly shown), 
 what other nation possesses even a small fraction of
 
 96 The Trade Economy of Federation. 
 
 Great Britain's manufacturing advantages ? And, 
 moreover, they are crippled by the necessity of hav- 
 ing to withdraw the very flower of their manhood 
 from productive employment in order to keep up 
 millions of productively idle troops. Suppose, now, 
 that foreign nations had followed England's example, 
 and had thrown open their ports and frontier-customs. 
 What would have b-een the inevitable result upon 
 their native industries ? More or less rapid extinc- 
 tion in manufactures, and diminished distribution in 
 raw produce. It is true that such extinction of costly 
 manufactures and such diminution of costly distribu- 
 tion would both be productive gains from a social- 
 scientific point of view, and that labour would there- 
 by be forced into more profitable channels. But 
 social science does not assert that the displaced 
 labour would necessarily find such new profitable 
 channels in any one country. If, for example, the 
 silk industries of Lyons or the textile factories of 
 Silesia ceased to exist, Lyonese and Silesian opera- 
 tives would not necessarily find other employment in 
 France and Germany. They would far more pro- 
 bably, and, certainly, more wisely, follow their trades 
 abroad. And if this consideration be extended to 
 entire populations, the conclusions are startling. In 
 Germany, 43 per cent, of the population live by 
 agriculture, 10 per cent, by commerce and the
 
 The Trade Economy of Federation. 
 
 carrying Trade, and the balance, 47 per cent., by 
 Protected industries, i.e., by industries which would 
 collapse were Protection withdrawn ; else, why protect 
 them? In France, the proportions are nearly the same. 
 In both countries, the industrial centres are gaining 
 at the expense of the agricultural districts. Germany 
 has, however, this advantage, that whereas her popula- 
 tion is increasing rapidly, that of France is almost at 
 a standstill. What, now, would be the result to either 
 country of a reversal of the Protectionist policy ? 
 Evidently a redistribution of, roughly, one-half the 
 existing labour, and, mainly, into agricultural or raw- 
 producing channels. But, in the first place, raw 
 production could not stand such an enormous acces- 
 sion to its ranks. And, in the second place, it is a 
 well-established fact that, although the yokel takes 
 readily and kindly to town-life, the artisan has an 
 utter abhorrence of agricultural labour. Conse- 
 quently, the outcome would be a rapid loss of popula- 
 tion, with prospects of but a slow subsequent re- 
 increase, a heavy loss in revenue, and a perilous 
 diminution of the national armies. Finally, if the 
 now Protected industries disappeared, and each nation 
 were left at the mercy of foreign supplies, what would 
 happen in the at-all-times probable event of war? 
 Englishmen should strive to disabuse themselves of 
 the Cobdenite notion that foreign statesmen and
 
 98 The Trade Economy of Federation. 
 
 Economists are foolishly infatuated with Protection. 
 They see, they have seen all along, the great advan- 
 tages of Free Trade — to England, But they see also 
 the expediency of, nay, the absolute necessity for 
 Protection — to themselves. And, until the existing 
 European bayonet-policy undergoes a radical change, 
 until Tennyson's grand lines are realised, it is as futile 
 as it is unreasonable to look for any alteration in 
 Continental Trade policy. 
 
 Such being the cause, which Cobden and Free 
 Traders have entirely overlooked, let us now glance 
 at the second point, which they have just as entirely 
 underrated. 
 
 Protectionist Powers of Endurance. 
 
 If the reader will be at the pains of referring to an 
 appendix note upon Foreign Trade, he will observe 
 that Protected countries have small trade-averages. 
 As a natural corollary to taxing imports, they have 
 had to frame their production policy upon the lines of 
 dispensing with foreign products, so far as they 
 possibly could. These lines were terribly expensive, 
 especially at first ; but they had to bear them. They 
 have been expensive throughout ; but still they have 
 borne them. Custom is a .second nature. The longer
 
 The Trade Economy of Federation. 99 
 
 foreign communities taxed their own pockets by taxing 
 imports, the more they got used to the tax ; until 
 finally artificially-enhanced prices came to be popu- 
 larly accepted as fair values. In the case of the vast 
 majority of such communities, foreign trade has 
 gradually come down so as to figure as but a sub- 
 sidiary item in the national accounts. Their trade 
 tends to become and, in course of time, does become 
 an internal or local trade. Their surplus produce 
 they export for just what it may chance to fetch, and 
 receive, in return, commodities which cither they 
 absolutely cannot themselves produce, or of which 
 they may happen to be short. This sort of traffic 
 bears about the same relationship to legitimate 
 commerce, as does a draper's "Annual Sale at an 
 Alarming Sacrifice " to his legitimate business. Be- 
 cause, forsooth, England has become dependent upon 
 her foreign trade for the very bread she eats, it has 
 been taken for granted that other nations would 
 similarly become dependent, if not for food, at least 
 for other necessaries, upon their foreign trade. This 
 assumption has not been borne out by the results of 
 some forty years of FreeTradeexperience. If England, 
 by a sudden convulsion of nature, were suddenly 
 to disappear from the face of the earth, foreigners 
 would still contrive to wear clothes, whereas, were she 
 spared and they engulfed, cannibalism would be
 
 loo The Trade Econojny of Federation. 
 
 rampant in England within six weeks. It is not to 
 be inferred that, becau-e foreign policy tends to 
 destroy foreign trade, therefore foreign commercial 
 men despise it. On the contrary, they labour hard 
 to keep as much of it as they can, and are very push- 
 ing with their surplus produce. So, too, our friend, 
 the draper, makes the most of his clearing sale. But 
 what can they do against the Protectionist will and 
 the Protectionist laws of a nation ? Merely emphasise 
 the fact, in figures, that Protection aims at reducing 
 foreign trade to a minimum. And this is why Free 
 Traders have been waiting in vain for signs of decay 
 in Protective policy. 
 
 Why Protection is Increasing. 
 
 Well, simply because it has failed, so far, in accom- 
 phshing the object for which it was adopted, viz. the 
 Protection of native industries from foreign (chiefly 
 British) competition. It is easily understood that 
 tariffs are necessarily tentative and elastic. The 
 British manufacturer has hitherto contrived, by using 
 improved machinery and by taking full advantage of 
 a cheap and overcrowded labour market, to reduce 
 the expenses of manufacture ; and so, in spite of 
 tariffs, to compete, upon something Hke fair terms,
 
 The Trade Economy of Federation. loi 
 
 with foreign producers. (The reason why these 
 tariffs were not long ago made absolutely prohibitive 
 will appear in the next section.) Moreover, he has 
 many times engaged, and undersold foreigners, in 
 special lines which, it had been thought, were safe from 
 his competition. These have had to, and still have 
 to, be added to the list. Nothing is safe from him. 
 He can, if he gets but half a chance, successfully 
 imitate and undersell anything and everything. 
 Hence clamours continually arise for more extended 
 and more severe import duties ; and to these 
 clamours Protectionist Governments respond will- 
 ingly enough. No other course is, indeed, logically 
 open to them. 
 
 They cannot, fairly, favour one set of producers 
 more than another. And it is evidently no use im- 
 posing duties at all, if these duties fail in their effects. 
 Consequently Protection has been, and still is, steadily 
 increasing in intensity and in extent. This fact is so 
 notorious in English commercial circles, and so 
 frequently referred to in the daily press, that it is 
 quite unnecessary to support it by special quota- 
 tion from, or reference to, such measures as the 
 M'Kinley tariff or the later additions to Continental 
 tariffs.
 
 J02 The Trade Economy of Federation. 
 
 How England has hitherto evaded Pro- 
 hibitive Tariffs. 
 
 It is obvious that were foreign markets protected 
 all round by absolutely prohibitive tariffs, foreign 
 trade would cease altogether. And the fact that 
 England has been doing three-fourths of her total 
 trade with foreign nations, is plain proof that, up to 
 the present, their tariffs have not been prohibitive, 
 but, rather, more or less moderate encouragements to 
 local industries, viewed as a convenient method of 
 raising revenue by indirect taxation. Yet this 
 moderation runs directly counter to the expedient 
 policy of these nations. How, then, has England 
 managed to secure such favourable treatment ? The 
 answer is, it must be confessed, more creditable to 
 English smartness than to English justice. She has, 
 throughout, persuaded foreign Governments to relax 
 rigid Protection in her favour by offering them, in 
 return, that which is not hers to give — special ad- 
 vantages in the markets of her (avowedly) self- 
 governing Colonies. She has, at various times, made 
 such treaties as the following, in every one of which 
 she has coolly mortgaged the commercial freedom of 
 every single dependency of the British Crown ; and, 
 in exchange, she has been admitted by these foreign
 
 The Trade Economy of Federal io7i. 103 
 
 Governments to the specially lenient tariff treatment 
 provided by " most-favoured nation " clauses. 
 
 Treaty with 
 
 France , 
 Italy . . 
 Spain 
 Portugal 
 Bulgaria 
 Roumania 
 Germany 
 Russia 
 Holland 
 Belgiiun 
 Sweden 
 Norway 
 Denmark 
 Switzerland 
 Austria- 
 Hungary 
 
 Expires 
 
 Feb. 1st, 1892 
 
 Feb. 1st, 1892 
 
 March, 1892 
 
 June, 1892 
 
 August, 1892 
 
 July, 1892 
 
 At one year's 
 
 notice on 
 
 either side. 
 
 Sample Clauses. 
 
 "The produce or manufac- 
 ture of Belgium shall not be 
 subject in the British Colonies 
 to other or higher duties than 
 those which are or may be 
 imposed upon similar articles 
 of British origin.'' — Tfeaiy 
 with Bclgiiaii^July 22,rd, 1 862 
 
 "In the Colonies and Pos- 
 sessions of Her Britannic 
 Majesty the produce of tiie 
 State of the Zollverein shall 
 not be subject to any higher 
 or other import duties than the 
 produce of the United King- 
 dom of Great Britain and 
 Ireland." — Treaty with Ger- 
 man Zollverein^ May 2Pth, 
 1865. 
 
 This is bad enough ; but it is not all. By an 
 additional stretch of Imperial authority, these clauses 
 were so interpreted as to debar the Colonies from even 
 making special commercial agreements with each 
 other ! Thus several of the Australian Colonies 
 would gladly have made differential tariff^ arrange- 
 
 ^ " Differential " tariffs are modifications of the existing 
 protective duties of a country in favour of one or more other 
 countries, with respect to certain commodities. The terms 
 " reciprocal " and "reciprocity" should, strictly, be reserved to
 
 I04 The Trade Econoviy of Federation. 
 
 ments with Canada, but it was found to be impossible, 
 owing to England's treaties, without admitting the 
 whole world, well-nigh, to the benefits of the compact. 
 Naturally the Colonies have protested against such 
 arbitrary and high-handed procedure, and probably 
 most Englishmen will admit that they have good 
 cause for complaint. And as it will be seen from the 
 table given that som.e of these treaties will expire at 
 various dates this year, the question of their renewal 
 will shortly form a leading Economic point. Of 
 course if England were to insist upon such renewal, 
 she could do so at the risk of a serious quarrel with 
 her Dependencies. Whilst, upon the other hand, if 
 she does not renew them, how is she to secure 
 " most-favoured nation " privileges for her produce ? 
 Is a hungry man justified in selling his children's 
 clothes to buy bread for himself? The question is 
 one which Englishmen will, later on, be called upon 
 to decide ; and it is distinctly a very awkward one. 
 
 The reader will here, very probably, exclaim, 
 " Then, after all, it is not unassisted Free Trade 
 which has carried England through, all these years ! 
 So far from Free Trade combating Protection upon 
 
 denote exact similarity, or absence of tariffs between countries 
 together with similar protective duties against other countries. 
 But "differential" and "reciprocal," as commonly used, are 
 well-nig-h interchangeable terms.
 
 The Trade Economy of Federation. 105 
 
 its own merits, it has been bribing its way into Pro- 
 tected markets ! " Well, it certainly does not seem 
 to bear out the Cobdcnite theory that England alone 
 would uproot Protection. But more than this I do 
 not care to say; firstly, because I am myself a 
 Colonial ; and, secondly, because it lies rather within 
 my province to enable the reader to form intelligent 
 opinions of his own than to give him mine. 
 
 It should here be noted that there is a possibility 
 of the foreign Governments refusing to renew the 
 treaties upon the old terms, as well as of England 
 anticipating such refusal ; in which case England's 
 action might depend upon the nature of any fresh 
 conditions proposed ; whilst, of course, a point-blank 
 refusal, by either side, to renew upon any terms, 
 would at once bring matters to a climax. So far 
 there is evidence only to show that most of the 
 foreign Governments are raising, or preparing to 
 raise, their tariffs, that the London Board of Trade 
 and Chamber of Commerce are cautiously feeling 
 their way, and that the Colonies will use every pos- 
 sible effort to have the treaties torn up. Not at all 
 impossibly, some proposal may by-and-bye be agreed 
 to, to renew the treaties, upon the present lines, for a 
 fixed period, so as to afford full time for discussion 
 and avert a very serious commercial crisis. But it is 
 always wise to be prepared for the worst, and
 
 io6 The Trade Economy of Federation. 
 
 Englishmen should, whilst there is yet ample time, 
 accustom themselves to reflecting upon the immedi- 
 ate effects which the repudiation of those treaties 
 would have upon England's Trade. And these may, 
 with tolerable certainty, be foreshadowed. The one 
 restraining cause once gone, of course there would 
 remain nothing wherewith to purchase entry into 
 Protected ports. 
 
 So soon as tariffs were raised to the prohibitive 
 point, England would be commercially ostracised, 
 and her Trade with foreign nations a thing of the 
 past. 
 
 There would remain the Colonies and Dependen- 
 cies. But they, with here and there an exception, 
 are also highly Protectionist, and would certainly not 
 throw open their ports out of any sentimental regard 
 for the mother country which has, all these years, 
 been sacrificing their commercial freedom to appease 
 her foreign customers. She cannot force them to 
 admit her goods upon her own terms. What could 
 she do ? Evidently, under the supposed conditions, 
 there would be but one course left to her — Trade 
 with them upon such terms as they might be willing 
 to agree to ; or, in other words, enter with them 
 into a Britannic Commercial Federation. 
 
 That is the form into which coming events seem 
 best fitted to be shaped, if only a wise foresight be
 
 The Trade Economy of Federation. 107 
 
 used in directing them. I have read somewhere, in 
 this connection, that " events are wiser than men." 
 But this appears to me to be rank fatalism, or still 
 ranker nonsense. IVIost certainly social science seeks 
 to guide the sequence of foreseen events, not to act, 
 upon the spur of the moment, as they happen. And 
 considering that the existence of prohibitive foreign 
 tariffs and the disappearance of the treaties are both, 
 at the utmost, merely a matter of time, the engross- 
 ing question of interest to all British social scientists 
 must surely be the elaboration of a commercial union 
 upon the existence of which the future of England's 
 commerce must entirely depend. In which spirit, I 
 venture to contribute my mite towards a successful 
 issue. 
 
 So many, so various, and so important are the 
 considerations involved, that it is not easy to decide 
 in what order they should be dealt with. The 
 sequence which I have followed seems to cover most 
 of the ground in broad outline ; though, of course, 
 the side issues are innumerable. 
 
 I. Should the proposed Commercial Union be 
 rigidly confined to communities owing allegiance to 
 the British Crown ? 
 
 Yes. It is impossible to admit foreign communi- 
 ties to a Britannic Union, which must eventually be
 
 io8 The Trade Economy of Federation. 
 
 followed by a political Britannic Confederation. But 
 it is by no means impossible to admit such of them, 
 as may ask to be admitted, to a Britannic Com- 
 mercial Alliance. Indeed, a little reflection will 
 make it appear that the concession of such an Alli- 
 ance would be as clearly a matter of justice as of 
 expediency. 
 
 It would be grossly unfair to ostracise a large 
 number of small nations, which, at present, are Pro- 
 tectionist chiefly for the sake of revenue, without 
 giving them a chance of repentance. And, moreover, 
 a door should always be left open even for the greater 
 nations (which, as a matter of course, will sulk at 
 first and, perhaps, for a very long time) should they 
 eventually decide to lower their tariffs. 
 
 The amount of British capital at present invested 
 abroad in all sorts of securities and enterprises, good, 
 dubious, and rotten, would challenge belief were it 
 added up and set down in hundreds of millions of 
 pounds sterling. I have neither leisure nor available 
 statistics for exact inquiry upon this point ; but I 
 may cite one example. The Argentine Republic has 
 absorbed in debt, railways, and industrial enterprises 
 generally, certainly not less than i^2 00,000,000, of 
 which fully two-thirds are British investments. 
 Roughly speaking, there cannot be less than 
 ;;^ 590,000,000 of British capital invested outside the
 
 The Trade Eco7iomy of Fedet'ation. 109 
 
 limits of the British Empire. And I need scarcely 
 point out that this enormous sum must be commerci- 
 ally safeguarded so far as may be possible. 
 
 II. Upon what terms should alien nations be ad- 
 missible ? 
 
 Under a Britannic Commercial Alliance Treaty 
 embodying differential tariffs with the Britannic Com- 
 mercial Union, The just principle should prevail, not 
 to exclude foreigners simply because they are foreigners, 
 but to admit them, if they choose to enter, upon terms 
 of reciprocity. More detailed suggestions will ap- 
 pear in a later section. 
 
 III. Can any estimate be formed as to what nations 
 would probably join such an Alliance ? 
 
 In all probability, those nations which are at 
 present most dependent upon British Trade for their 
 supplies and for their revenues, and to which a foreign 
 Trade is of more importance than considerations of 
 purely national policy. In which category the fol- 
 lowing nine nations, which are, at present, England s 
 best foreign customers, would not be found. ^ 
 
 ^ Italy is not included among outside nations because she is 
 regarded as certain to join the Union in Alliance. Probabilities 
 point in the same direction in the case of Sweden, Norway, 
 Denmark, Turkey, and Greece.
 
 I lo The Trade Economy of Federation. 
 
 Trade with Great Britain (i8 
 
 United States - - - ;^i39, 340^409 
 
 France- . . - - 67,881,499 
 
 Germany . . - - 58,249,563 
 
 Holland - - . - 42,863,002 
 
 Russia 35^797)746 
 
 Belgium . . - . 31,284,452 
 
 Spain 16,466,751 
 
 Portugal - - - . 6,097,037 
 
 Roumania - - - - 4,513,598 
 
 ^^402,454,057 
 
 These nations, with the smaller States more or less 
 dependent upon them, would, in fact, be the up- 
 holders of rigid, isolated Protection. The rest of the 
 world would trade within the sphere of the Britannic 
 Commercial Union, or of the Britannic Commercial 
 Alliance. 
 
 IV. In what position would British Trade then be 
 as compared with what it is now ? 
 
 Practically, it is impossible that Trade should 
 wholly cease between the Union and the countries 
 enumerated above, which may be termed "'outside 
 nations." Some fraction of trade would inevitably 
 survive even the most drastic Protective tariffs. But 
 let us ignore this fraction (which, of course, would be 
 upon the credit side) and suppose the very worst, viz. 
 that Trade entirely ceased between the outside nations
 
 The Trade Economy of Federation. 1 1 1 
 
 and the Union, We must then deduct the present 
 amount of their Trade, and then see how far the de- 
 ficiency could be made good from fresh sources. The 
 entire volume of Colonial Trade would be kept within 
 the Union ; and allowance must be made for increased 
 Alliance Trade. The profit and loss account would 
 appear to stand thus : 
 
 Old Account, 
 
 Great Britain's Trade with the nine countries named ;,^402,454,o57 
 
 „ „ British Colonies, etc. 187,695,862 
 
 ,, ,, other nations 152,213,217 
 
 ^742,363,136 
 
 New Account. 
 
 Total Trade of British Colonies, etc. (18S9) ;^43i,637,864 
 
 Trade of other nations (Alliance) 152,213.217 
 
 Estimated increase under Alliance 50,000,000 
 
 ;^633,85i,o8i 
 
 This means that the entire Trade of the Union would 
 be ^^108,512,055 less than that of Great Britain alone 
 now is ; or ^^"540,248,9 19 less than the whole Trade of 
 the British Empire is at present. If, indeed, Great 
 Britain could secure the whole of the new Colonial 
 Trade, the prospect would not be so serious. But she 
 cannot; it is unreasonable to credit her with more 
 than two-thirds of it. And, thus, her individual 
 Trade would sink to ;^489,97 1,793, a decrease of 
 ^^252,391,3 13 upon existing figures.
 
 112 The Trade Economy of Federation. 
 
 This is by no means synonymous with national 
 ruin. Far from it. But it is certainly synonymous 
 with very serious national loss, and may well impress 
 all with a sense of the gravity of the situation during 
 the next few years. Still we must never lose sight of 
 the far more overwhelming disasters that would be in 
 store for us had we no Colonial Empire to fall back 
 upon ; for, plainly, had we no materials wherewith 
 to build up a Commercial Union of our own, we 
 would lie wholly at the mercy of prohibitive foreign 
 tariffs. Nor must we overlook the fact that it will be 
 mainly with Great Britain to minimise her threatened 
 losses by concentrating her energy and her capital 
 upon the unlimited industrial resources of her domin- 
 ions. In our estimate we have made no allowance for 
 Colonial Trade expansion. Yet there is no reason, as 
 will presently be shown, why such expansion should 
 not take place, and to the extent of wiping out the 
 Trade deficit within a reasonably short period. 
 
 V. Upon what basis is it probable that a Britannic 
 Commercial Union could be formed ? 
 
 Staunch Free Traders will here at once rush into the 
 breach and exclaim, " Free Trade amongst all com- 
 ponent States of the Union, with reciprocal or differ- 
 ential tariffs against the rest of the world ! " Impos- , 
 sible. The Colonics would simply refuse to listen to
 
 The Trade Economy of Federation. 113 
 
 such a proposal, and, without their co-operation, of 
 course no Union is possible. It has been shown, in 
 an earlier portion of this work, that national expedi- 
 ency is the mainspring of Protection, the one sound 
 argument upon which it is based. But, as there is a 
 very general belief, in England, that the Colonies 
 adopt a Protective policy chiefly for revenue purposes, 
 this is an opportune moment to prove that this belief 
 is quite erroneous, that revenue-raising is merely a 
 secondary consideration. In order to do this, I pro- 
 pose to compare two Colonies, Victoria and New 
 South Wales, which pursue totally different systems 
 of Trade policy. 
 
 Victoria 
 
 New South Wales 
 
 Policy. 
 
 Protection 
 P"ree Trade 
 
 Population. 
 
 1,104,288 
 1,122,200 
 
 Trade. 
 
 Revenue. 
 
 ;^37,825,897 ^8,674,710 
 4*3,i57>99i I 9,ob3,397 
 
 It is true that New South Wales has a larger area 
 than her sister Colony, but (as has many times been 
 statistically proved by the New South Wales Free 
 Trade Association) if the land revenues of both be set 
 aside, the balance is still heavily in favour of New 
 South Wales. Here, then, we have clear evidence 
 that tariff imposts are neither necessary nor profitable 
 from a revenue aspect. They are, indeed, avowedly
 
 1 1 4 The Trade Economy of Federation. 
 
 resorted to " to protect native industries," as is im- 
 plied by the very name, " Protection ; " or, in other 
 words, they are, by all the Colonies, except New 
 South Wales, deemed to be nationally expedient 
 And nothing having occurred, or having been authori- 
 tatively suggested, so far, to cause the Colonies to 
 alter their views as to national expediency, it is use- 
 less even to hint at Free Trade to them. To clench 
 the matter, as it were, it may be noted that an Aus- 
 tralian National Convention met in Sydney, in March 
 1 89 1, for three principal objects : to federate the Aus- 
 tralian Colonies, to discuss Great Britain's foreign 
 treaties, and to arrange inter-colonial differential tariffs. 
 New South Wales being in a minority of i to 5. 
 
 We have next to consider whether it would be pos- 
 sible to leave each State in the proposed Union per- 
 fectly free to regulate its own tariffs as regards other 
 States and nations in commercial alliance. No ; this 
 could not be. There must be some tariff limit. 
 Otherwise the threatened European tariff deadlock 
 would be continually cropping up, on a smaller scale, 
 within the Union ; separate little differential Unions 
 would be formed ; and the trouble would be perpetu- 
 ated. Moreover, if there be not unity of Trade policy, 
 how can there be a Commercial Union at all ? 
 
 VI. How, then, is it possible to reconcile English
 
 The Trade Economy of Federation. 1 1 5 
 
 Free Trade requirements with Colonial Protective in- 
 sistence ? 
 
 By compromise. England must modify the Free 
 Trade taught by Cobden, and the Colonies must 
 modify the Protective tariffs taught by expediency. 
 /// medio tiitissimiis ibis : the difficulty is to plan out 
 a safe middle course. That the problem can and will 
 be solved, in time and after due discussion, may, I 
 hope, be regarded as certain ; but it will tax all that 
 there is of brain-power and of statesmanship in the 
 Empire to solve it. The public mind must be 
 aroused in every section of our dominions to a just 
 appreciation of the tremendous issues at stake. The 
 c^uestion must be viewed as a national one, and 
 must be so discussed alike in every senate and in 
 every village debating club. .Trade conferences must 
 be held, in order that the special interests of every 
 community may be clearly set forth and none be 
 overlooked or neglected. The press, that mighty 
 mirror of national opinion, must devote its trained 
 critical power to sifting the grain of practicability 
 from the chaff of ill-considered proposals. Each one 
 of us may do something towards a solution, though 
 no one of us may be able to do much. And having 
 thought out an opinion, it becomes the duty of each 
 to formulate it, in order that its value may be recog- 
 nised or its worthlessness exposed.
 
 1 1 6 The Trade Economy of Federation. 
 
 VII. Suggestions for a basis. 
 
 Econoviic distribution of production must be studied. 
 No Commercial Union could be effected upon a basis 
 of enabling each community to become its own " uni- 
 versal provider." Upon the other hand, no one 
 nation can be allowed a manufacturing monopoly of 
 everything. Hence it is necessary to distinguish, in 
 the case of each community, between its naturally 
 most advantageous and its naturally least advantage- 
 ous lines of production. Now, no country imports 
 that which it can profitably produce, nor exports that 
 which the purchasing country, or countries, can pro- 
 fitably produce. Therefore a country's imports are 
 an index to its productive weakness, and its exports 
 an index to its productive strength. Hitherto manu- 
 facturing Free Trade has advised, " Devote all your 
 energies to your exports, / will supply you with 
 imports." Whereto raw-producing Protection has 
 replied, " Our strong lines of production, our exports, 
 are very w^ell able to look after themselves ; but our 
 weak lines, as shown by our imports, need to be pro- 
 tected." Wherein lies the safe middle course between 
 these extremes of policy? Clearly a distinction must 
 first be drawn between imports of prime and imports 
 of secondary importance ; between, for example, 
 necessary wearing apparel and fancy biscuits. For 
 the former the term " staple," and for the latter^
 
 The Trade Economy of Federation. 117 
 
 "secondary," might conveniently be adopted. The 
 import returns of each community would show which 
 are its principal staple, and which its most valuable 
 secondary imports, the line of demarcation being 
 arbitrarily, but easily, fixed. Then, with respect to 
 both categories, the argument would hold good that 
 large importation of particular commodities proves at 
 once their indispensability to the community, and the 
 extreme difficulty or impossibility of producing them 
 locally ; but only in the case of staples need the 
 argument be pressed to its logical conclusion. That 
 conclusion, of course, is that such staples should be 
 very lightly taxed (if taxed at all) quoad other States 
 of the Union, more highly taxed quoad States in 
 Alliance, and prohibitively taxed quoad outside 
 nations. If, for example, woollens are a staple 
 Canadian import, in spite of existing tariffs, the 
 attempt to foster woollen industries in Canada is 
 evidently a failure. Yet they are of necessity to the 
 Canadian people. Remove, therefore, the tax upon 
 woollens. This, it will be seen, is a great concession 
 to Free Trade principles. Upon the other hand, 
 those staples which are least imported, but are, at the 
 same time, largely consumed, point to the conclusion 
 that they have, as industries, taken strong, healthy 
 root locally under Protection tariffs, and have thereby 
 justified their claim to continued Protection. For
 
 1 1 8 The Trade Economy of Federation. 
 
 instance, I can buy a locally-made tweed in Geelong 
 (Victoria), or in Mosgiel (New Zealand), as good in 
 quality and nearly as cheap as in Bradford, which 
 proves that this particular industry has been success- 
 fully Protected. Therefore, in the case of these two 
 Colonies, by all means maintain the tariff upon tweeds. 
 And this is an equally great concession to Pro- 
 tectionist principles. 
 
 As regards the least important staples and the 
 secondary imports, there does not appear to be any 
 necessity to protest against the right of each State to 
 fix its own tariffs within some reasonable limit agreed 
 to by all \ but, still, with a higher tariff for States in 
 Alliance, and prohibition for outside nations. In 
 practice, the acceptance of such a basis would neces- 
 sitate considerable revision of existing tariffs, and 
 would result in great diversity of tariffs throughout 
 the Empire. But the former change would really 
 involve little more than clerical work ; whilst the 
 latter would be distinctly beneficial to the shipping 
 interests. There would inevitably be complaints 
 from those who, under uneconomically-devised tariffs, 
 have embarked in enterprises utterly uncongenial to 
 local capabilities. But that cannot be helped ; the 
 interests of the consuming majority must come before 
 those of the ill-advised, dear-producing minority. 
 And it will be allowed that, from an economic distri-
 
 The Trade Economy of Federation. 1 1 9 
 
 bution point of view, the suggestion goes almost as 
 far as possible towards reconciling the conflicting 
 interests of Free Trade and Protection. 
 
 Raw imports must be Protected as ivcll as manu- 
 factured goods. That is to say, England must Pro- 
 tect Colonial raw produce against competition from 
 alien nations, though, as before, with a discrimina- 
 tion between nations in alliance and outside nations. 
 This is a sine qua non ; because otherwise the 
 Colonies would reap no benefit whatever from the 
 Union. For example, Australian wool must be Pro- 
 tected against South American wool, so as to give it 
 a distinct advantage ; whilst against Continental or 
 American wool, it must be rigidly safeguarded. 
 Wool may not appear to be a very happily chosen 
 illustration, since the Australian and Cape Colonies 
 have almost a monopoly in its production. But that 
 is not the point. Foreign nations outside the Alliance 
 must find no market for their produce, raw or manu- 
 factured, within the British Empire. This is the very 
 raison d'etre of the Commercial Union. If any 
 attempt be made to discriminate between imports 
 and exports, or between raw and manufactured 
 produce in favour of outside nations, the Colonics, 
 seeing no quid pro quo, will have nothing to do with 
 a Union at all. It is just possible that they would 
 consent to make an exception for a definite number
 
 I20 TJic Trade Economy of Federation. 
 
 of years in the case of one great English staple 
 import — cotton, and upon the following grounds : 
 none of the Colonies produce it ; it is a necessary of 
 everyday life; and it would be unfair to crush suddenly 
 the enormous English interests vested in its manu- 
 facture, India and Egypt would suffer most by 
 England's retention of the American supply ; but a 
 small differential tariff in their favour would, perhaps, 
 stimulate them to overtake America within, say, ten 
 years. In point of fact, they are coming up reason- 
 ably fast already, considering how short a time they 
 have been cotton-growing. 
 
 It may here be remarked that although the United 
 States exported to England in 1S89, ^33,811,444 
 worth of raw cotton, they only took back ^2,306,600 
 worth of English cotton manufactures ; and the 
 M'Kinley tariff has now made even this beggarly 
 export of English goods impossible ! Does it not seem 
 hard that we should have to buy their raw material 
 until India and Egypt can supply us ? But social 
 science is above all feelings of retaliation — unless it 
 pays. 
 
 Moreover, although, upon the whole, by far the 
 larger portion of England's trade is, as we have 
 seen, with foreign nations, yet her own diminions 
 are, proportionately, by far her best purchasing 
 customers.
 
 The Trade Economy of Federation. 1 2 1 
 
 British imports from foreign countries Z330)37i-5-4 
 British exports to foreign countries 224,275,950 
 
 Excess of imports ^106,095,574 
 
 British imports from Colonies, etc. ^97,266,071 
 
 British exports to Colonies, etc. 90,429,791 
 
 Excess of imports ^6,836,280 
 
 As samples of important imports (other than fuod), 
 which England at present receives from the Colonies, 
 the following percentages, compiled from Board of 
 Trade returns for year ending November, 1890, may 
 be quoted : — 
 
 Percentage received from Colonies, etc. 
 
 Wool 90 per cent. 
 
 Tallow 50 
 
 Leather 41 
 
 Cotton 23 
 
 Tin 92 
 
 Copper 32 
 
 Whilbt of manufactures exported by England, the 
 following headings (representing about 42 per cent, 
 of the entire Colonial import Trade from England, 
 and about 17 per cent, of the entire import foreign
 
 1 2 2 The Trade Economy of Federation. 
 
 Trade from England) show some lines wherein the 
 Colonies rather more than hold their own : — 
 
 Mamifactures exported by Great Britain to . 
 
 Brit 
 
 ish Colonies, 
 
 etc. 
 
 Foreign Nations 
 
 Cotton - 
 
 - 
 
 £22,795,014 
 
 £26,435,986 
 
 Wearing 
 
 Apparel 
 
 3,754,296 
 
 866,200 
 
 Haberdashery- 
 
 1,423,297 
 
 533,318 
 
 Boots an 
 
 d Shoes - 
 
 1,286,013 
 
 429,762 
 
 Woollen 
 
 tissues - 
 
 1,216,768 
 
 1,710,565 
 
 Railroads, etc. 
 
 3,630,288 
 
 3,403,453 
 
 Cutlery 
 
 - 
 
 1,050,870 
 
 1,390,126 
 
 Paper 
 
 - 
 
 805,065 
 
 295,725 
 
 Beer - 
 
 - 
 
 1,001,099 
 
 665,411 
 
 Spirits - 
 
 
 1,066,924 
 
 235,163 
 
 
 £38,029,634 
 
 ^35,575,709 
 
 VIII. Great Britain's Food Supply. 
 
 Could Great Britain's enormous and steadily 
 increasing requirements in the shape of food 
 be adequately met by the proposed Commercial 
 Union ? 
 
 This will by many be regarded as the most im- 
 portant question of all. England, it will be urged, 
 might survive loss in her Trade, and might even do so 
 with some show of cheerfulness, if it be made clear 
 that such loss will only be temporary. But food she 
 must have, even had she to go down upon her knees, 
 metaphorically, to her foreign customers, and put up
 
 The Trade Economy of Federation. 123 
 
 with the very worst they can do in the way of tariff 
 persecution. Therefore, much as such a Commercial 
 Union is to be desired, and brilHant as are the 
 prospects which it opens out, so long as Eni^lishmen 
 are dependent upon the foreigner for the very bread 
 they eat, it is a dream impossible of realisation. 
 
 The contention is a just one ; but, after all, it begs 
 the question. That England, at the present time, 
 receives by far the greater proportion of her imported 
 food from alien sources, will be evident from a few 
 items of important products — the absolute necessaries, 
 we may say, of subsistence. 
 
 From Colonies, etc. 
 
 
 Wheat, corn, etc. 
 
 , 24 per cent 
 
 Flour, 
 
 12 
 
 
 Live cattle, 
 
 22 
 
 
 Dead cattle, 
 
 31 
 
 
 Fresh mutton, .. 
 
 49 
 
 
 Sugar, 
 
 16 
 
 
 Tea, 
 
 72 
 
 
 Coffee, 
 
 Zl 
 
 
 Rice, 
 
 80 
 
 
 From Foreign Countries. 
 
 76 
 
 88 
 78 
 69 
 51 
 84 
 28 
 
 63 
 20 
 
 cent. 
 
 Or, taking a general average of these articles, England 
 imports 38 i per cent, from her own possessions, and 
 6rg per cent, from alien countries. The nature and 
 value of her food imports for the past year were as 
 follows :
 
 124 ^^^<^ Trade Economy of Federation. 
 
 Live Animals, 
 
 10,359.852 
 
 Meat, Butter, 
 
 Cheese and 
 
 Eggs. 
 
 45>3S5.58i 
 
 Wheat and 
 Flour. 
 
 31,054,410147,365,135 
 
 Grain and 
 Sugar. 
 
 Fruit and 
 Vegetables. 
 
 Totals 
 
 6,884,787 141,019,765 
 
 Not wishing to overload this work with statistics, I 
 refrain from showing the source of each and every one 
 of these items. It is necessary, however, to state that, 
 taking the whole of the food imports, the British 
 possessions do not show even 38 per cent, emerging 
 with 327 or, say, one-third. They receive, con- 
 sequently, ^47,006,588, as against ^94,013,177 re- 
 ceived by foreign nations for food supplies. And it 
 is clear that England at present cannot dispense with 
 the foreigner. 
 
 But, if it can further be shown that her present 
 dependence upon alien sources is entirely her own 
 fault, and that her own possessions could easily be 
 made to take the foreigner's place, this apparently 
 strong objection to the Commercial Union will be 
 overcome. 
 
 That it is her own fault is but another way of 
 saying that it is the inevitable outcome of her past 
 Trade policy of sacrificing her Colonial to her foreign 
 commerce ; and this (treaties included) has, I hope, 
 been abundantly proved already. 
 
 As to the powers of the British possessions to
 
 The Trade Economy of Federation. 125 
 
 treble the amount of their present food contributions, 
 tliat demands a very careful economic consideration 
 both of the products required, and of the advantages 
 existing in various sections of the Empire for their 
 production. 
 
 Live Animals: Cattle. The number imported 
 fluctuates extraordinarily from year to year. Thus, 
 it was 474.750 in 1883; 295,961 in 1887 ; and 555,222 
 in 1889, of which latter number, 126,000 came from 
 Canada. Could Canada supply the whole demand ? 
 Not quite, for a few years to come, since there are in 
 the whole of British North America but 2,391,000 
 head; but with a little tariff encouragement she could 
 considerably increase her present export. Australia 
 {zvith her 11,412,986 cattle^ is too far for the live 
 traffic. If, however, a couple of the South American 
 republics, Argentina and Uruguay, came into Alliance 
 (as they to a certainty would), the balance could eas- 
 ily be made up. Between them they own nearly 
 23,000,000 head, accepting local statistics. Within 
 the last few months I have myself returned from a 
 lengthy visit to the River Plate, and can certify, from 
 personal up-country experience, tr.at practically un- 
 limited droves of fairly fat novillos (.bur-year-old 
 steers) may be bought at from fourteen to eighteen 
 shillings a-piece. Moreover, a large and increasing 
 traffic has sprung up in live sheep between Buenos
 
 126 The Trade Economy of Federation. 
 
 Ayres, Montevideo, and Liverpool. If it pays to 
 carry sheep, why not cattle also ? This is, of course, 
 a question for experts in the cattle trade to answer. 
 But even if their answer be unfavourable, there is still 
 the frozen beef to fall back upon ; and of this the 
 supply is literally inexhaustible. Why, Queensland 
 alone, with her 5,000,000 head of cattle, and the 
 numerous refrigerating works erected at Brisbane, 
 Rockhampton, etc., in anticipation of orders which 
 have not yet arrived, could supply the English 
 markets abundantly — to say nothing of all the 
 other Colonies. 
 
 Live animals : SJieep. The live sheep trade 
 fluctuates even more than that in cattle. As long 
 ago as 1882 1,124,391 were imported, whereas 
 in 1889 the number fell to 677,958, a decline 
 probably largel}- due to increase in the frozen mutton 
 trade, especially with New Zealand. The new live 
 sheep trade with the River Plate will certainly bring 
 up the numbers again for 1890; and Argentina claims 
 to have the enormous number of 84,000,000 sheep to 
 draw upon. The numbers in Australia are still larger, 
 reaching the marvellous total of 101,000,000! Surely 
 with the resources of the Cape, Canada, and the other 
 possessions thrown in, the prospect of dear mutton, 
 at all events, seems invisible. 
 
 In connection with the frozen meat trade, it may
 
 The Trade Economy of Federalion. 127 
 
 be remarked, that the popular prejudice against it is 
 rapidly dying out ; indeed, thousands eat it daily 
 without knowing it. And, furthermore, that there 
 exists a strong ring of middlemen for the purpose of 
 keeping up retail prices. It is an economic fact, 
 which has been demonstrated over and over again, 
 that frozen mutton should not cost more than 2ld. to 
 3d. per lb. retail ; beef should average id. to i^d. more 
 per lb. Co-operation is needed here. 
 
 Live animals : Pigs. The number imported in 
 1889 was 25,324, and, seeing that there are 835,469 
 in Ontario and Quebec alone, fresh pork can never 
 become scarce. 
 
 As for the various sorts of meat, other than live 
 and frozen, the figures already quoted prove con- 
 clusively that there is no occasion to apply to the 
 united States, or to the Continent, for a single mouth- 
 ful. And be it carefully observed that we have, so 
 far, had no occasion to go beyond two of our Colonics, 
 with the alternative co-operation of a couple of States 
 in Alliance. 
 
 Prices would not be sensibly affected, because the 
 meat resources at our command are so vast that the 
 keenest competition would set in once the foreigner 
 was excluded by a moderate tariff against him. 
 
 Butter, Cheese, and Eggs. For fresh butter and 
 eggs, England would have to look mainly to herself
 
 128 TJie Trade Economy of Federation. 
 
 and to Canada. And, upon sound economic grounds, 
 it would vastl)^ improve the condition of her own 
 rural districts, were she so compelled to look. Econo- 
 mists have for years been preaching to unheeding 
 British farmers the expediency of devoting them- 
 selves to dairy-produce, poultry, and vegetables. 
 But the British farmer is conservative and ultra-slow 
 in grasping new ideas. He hankers after the plough, 
 and he dislikes the spade ; he despises the milk-pail, 
 and he loathes the hen-roost. He wants to do as his 
 father did before the corn laws came into existence ; 
 but he can't. Wheat and cereals of all kinds can 
 now be grown in the Antipodes and placed upon the 
 London market at a price with which he cannot 
 compete. If he will be a ploughman, he must 
 migrate to the Colonies and take his plough with 
 him. In England, with his ideas, he is an anachron- 
 ism, a glaring instance of the wide-spread ignorance 
 of profitable distribution pointed out in an earlier 
 portion of this work. As an agriculturist, he cannot 
 hope to benefit by any tariff against foreign cereals, 
 since it is not proposed to protect him against British 
 possessions ; and this fact I desire especially to 
 impress upon country readers. Dairy-farming has, 
 of late years, made considerable progress. It must 
 make still more ; and to it must be superadded 
 poultry-farming and market-gardening. Canada can
 
 The Trade Economy of Federatio7i. 129 
 
 greatly increase her output ; but she will not, for very 
 many years, be able to meet the present large de- 
 mand. There is therefore every encouragement for 
 the British rural populations to engage in these 
 industries, in which (another great advantage) a 
 woman's labour very nearly equals a man's. Failing 
 such awakening to modern exigencies, it is useless 
 blinking our eyes to the certainty that fresh butter 
 and eggs will, in a few years at most, be scarce and 
 dear. 
 
 Salted butter and cheese need occasion no anxiety, 
 since they can travel any distance. At present this 
 industry is shamefully neglected in Australia, simply 
 because, with all their vast herds, it does not pay to 
 export against American and Continental competi- 
 tion ; and Australians themselves care little for dairy 
 produce. Highly sweetened tea without milk is the 
 ordinary national beverage. 
 
 Wheat and Flour. Here we stand upon especially 
 firm ground. Whatever excuses her apologists may 
 find for England in the matter of the foreign treaties 
 (and they certainly are not very apparent), there are 
 absolutely none for her blind, unreasoning Cobdenism 
 in the matter of bread-stuffs, because ignorance of the 
 wheat-producing capabilities of her own dominions is 
 a stain upon English statesmanship, not an excuse. 
 She has literally built up American agricultural in-
 
 130 The Trade Economy of Federation. 
 
 tercsts. Her capitalists supplied the means of start- 
 ing the vast wheat farms, and of constructing the 
 railways for conveyance of the produce to British 
 ships for carriage to English markets. Her surplus 
 population has streamed in millions towards the 
 favoured Republic. All for what ? In order that 
 ministers might be able to boast about the famous 
 " cheap loaf." Has it been a cheap loaf? No ; unless 
 all our arguments against Protection are worthless ; 
 it must have been a dear loaf, for the simple reason 
 that everytJiing in a Protected country is produced at 
 a maximum cost. It is quite true that it has been, at 
 all events, the cheapest loaf which the world offered 
 for sale. It is quite true also that the principles of 
 Free Trade teach us to buy in the cheapest market. 
 Yes ; but Free Trade, or, at least, intelligent Free 
 Trade, does not teach us to bolster up foreign Pro- 
 tectionist industries, and then try to persuade our- 
 selves that we have done the best we could. How- 
 ever, a few figures will soon clear up this point. I 
 have taken prices during the ten years preceding the 
 Corn Bill, and also during the same period afterwards, 
 and I have averaged both. There is a difference in 
 the two periods of is. id. It may be urged that this 
 difference would have been greater but for the 
 Crimean War. So, too, it might have been less, but 
 for the bad harvests that followed Her Majesty's
 
 The Trade Economy of Federatio 
 
 71. MI 
 
 accession. I have added prices and average during 
 the past ten years. 
 
 Average price of Wheat before and after the Corn Bill of 1846 : 
 
 1835- 
 1836. 
 
 1837. 
 1838. 
 1839. 
 I840. 
 1841. 
 1842. 
 1843. 
 1844- 
 1845. 
 
 Per Quarter. 
 
 S. D. 
 
 39 4 
 
 48 6 
 
 55 10 
 
 .64 7 
 
 .70 8 
 
 66 
 
 64 4 
 
 57 3 
 
 50 I 
 
 51 3 
 
 50 10 
 
 II I 619 o 
 Average : 56 "275. 
 
 Or, 56s. 3d. nearly. 
 
 1846. 
 1847. 
 1848. 
 1849. 
 1850. 
 1851. 
 1852. 
 1853- 
 1854. 
 1855. 
 1856. 
 
 Per Quarter, 
 S. D. 
 
 54 8 
 
 69 9 
 
 50 
 
 44 
 
 40 
 
 38 
 
 40 
 
 52 
 
 72 
 
 74 
 
 69 
 
 II I 607 
 
 Average : 55 '195. 
 Or, 55s. 2d. nearly. 
 
 1880. 
 1881. 
 1882. 
 1883. 
 1884. 
 
 Prices and average during the past ten years : 
 
 Per Quarter. 
 S. D. 
 
 •44 
 •45 
 •45 
 .41 
 
 •35 
 
 1885. 
 1886. 
 1887. 
 1888. 
 
 l88q. 
 
 Per Quarter. 
 
 S^ D. 
 
 32 10 
 
 31 
 
 •31 
 
 .29 
 
 o 
 6 
 10 
 9 
 
 10 I 369 II 
 Average : 37s. nearly. 
 
 After all, then, wheat has, in spite of fluctuations, 
 fallen in price since 1846, when Sir Robert Peel
 
 132 The Trade Economy of Federation. 
 
 passed his Corn Bill and gladdened the souls of all 
 good Cobdenites. Yes ; and I have no quarrel with 
 Sir Robert Peel's Bill, but only with the cosmopolitan 
 Cobdenism that could not see its way to taking a 
 statesmanlike view of the inevitable ultimate effects 
 of that Act : that had a nose to sniff out the means 
 of cheapening bread, but could not see a yard ahead 
 of that nose. In the ordinary course of events, as 
 knowledge of scientific farming extended, and with 
 improved agricultural machinery, bread was bound 
 to cheapen. Bill or no Bill. If illustration be wanted 
 of this, we need only reflect that it still pays to grow 
 wheat in England (although, of course, upon a steadily 
 decreasing scale), even with the mere cost of freight 
 in favour of the home-grower. The cheapening of 
 bread cannot be fairly attributed wholly to the Corn 
 Laws. As well might the Conservative-Protectionist 
 squire in 1846 point out that wheat had been cheap- 
 ening, under Protection, since 1812, when it stood at 
 126 shillings and sixpence a quarter, whereas in 1845 
 it had fallen to 50s. lod. a quarter. To this the 
 Cobdenites retorted that it had not cheapened as 
 fast as it ought to have done. Well, that is precisely 
 my contention now : that, although wheat has cheap- 
 ened since 1846, it has not done so nearly as fast as 
 it should have done ; that, after 44 years of Free 
 Trade, it should now be very much lower in price
 
 The Trade Economy of Federation. 133 
 
 than it is ; and, furthermore, that the cause of this 
 slowness has been in abandoning wheat -production to 
 a highly Protective community. Consider how small 
 is, after all, the average difference shown by our 
 tables. Had the same British capital, the same 
 British purchasing-custom, and the same British 
 emigration poured into British territory, wheat would 
 now be far lower in price than it is, because, in no 
 British community has Protection, even when smart- 
 ing under neglect, been so rigid as in the United 
 States ; and, as will later on be shown, the natural 
 tendency of a Colony with settled, thriving industries, 
 is not towards Protection, but towards Free Trade. 
 The younger the Colony, and the more vague its 
 industries, the greater the tendency towards Protec- 
 tion. English neglect and the apparent necessity of 
 working out some sort of independent existence are 
 the chief causes of Colonial tariffs. Thus, whereas 
 the older-established mother Colony of Australasia, 
 New South Wales, is Free Trade in policy, every one 
 of her offshoots is Protectionist. 
 
 It must, of course, be understood clearly that, in 
 all this, I have no quarrel with Free Trade principles, 
 but solely with the short-sighted application of those 
 principles, which has resulted in jeopardising the 
 entire fabric of British commerce. John Bright's 
 Colonial policy throughout was " Let them'^^go;" and
 
 134 ^^<^ Trade Economy of Federation. 
 
 that policy has been the accepted text of modern so- 
 qalled LiberaHsm. That poHcy has been followed in 
 all but actual repudiation. The trade of the Colonies 
 has been sacrificed, their energies fostered only when 
 the London Stock Exchange saw its chance. England 
 has wooed the foreigner, and the foreigner now turns 
 to rend her with M'Kinley tariffs and French exclusion 
 bills. Had she taken the trouble to inform herself as 
 to the cereal capabilities of her own dominions, she 
 would, by this time, be enjoying a cheaper loaf, the 
 United States would be an out-at-elbows, shin- 
 plastered collection of communities without any Trade 
 at all (they have only a £Af 8s. average noiv), and the 
 British Empire would be the most powerful Confed- 
 eracy in the world. 
 
 Why did not England do so ? Ah ! Why did not 
 Hannibal go on to Rome instead of stopping at 
 Capua? Ignorance, my reader; simple, downright 
 ignorance. Up to within a few years ago, even the 
 best informed Englishmen knew practically nothing 
 of Colonial affairs, whilst popular ignorance upon the 
 subject was really amazing. Letters arriving in 
 Australia, with such superscriptions as " Mr. Dash 
 Blank, Adelaide, near Melbourne, New South Wales," 
 were too common even to raise a laugh. Canada also, 
 although so near, was popularly regarded as a sort of 
 frozen wilderness, where people pursued seals upon
 
 The Trade Economy of Federation. 135 
 
 toboggans, performed all labour upon snow-shoes, and 
 annually enjoyed a six months' eclipse of the sun. 
 As for the Cape, that simply conjured up visions of 
 storms, diamonds, omnivorous ostriches, and happy 
 Hottentots. Only of late years have the wheat rais- 
 ing potentialities of India been discovered. In fact, 
 the resources of the Empire have been a blank page ; 
 although, in reality, but one word fairly describes 
 them, — unlimited. 
 
 What Colonial land is actually under crop? In 
 Canada, 11,614,000 acres, besides 280,000 acres under 
 orchard culture. In Australia, 20,771,000 acres, to- 
 gether with an unstated orchard area, which must be 
 considerable, seeing that one township alone, Parra- 
 matta, turns out eleven million dozens of oranges 
 annually. 
 
 And are these Canadian and Australian areas suit- 
 able for wheat ? Yes, with the exception of some 
 4,000,000 acres in the northern portion of New South 
 Wales and in Queensland, where wheat is replaced 
 by maize. The average yield per acre ? Taking all 
 cereals grown at present, 17 bushels to the acre, mak- 
 ing a total yield of 32,385,000 bushels, or 4,048,125 
 quarters. This is a mere bagatelle compared to the 
 possible output. At present it is impossible for any 
 Colony to compete with the United States owing to 
 the vast established cereal industries of the latter.
 
 136 The Trade Economy of Federation. 
 
 their proximity to English markets, and their wheat 
 rings, which rig and rule these markets. But, once 
 let it be known that, on and after a certain date, the 
 American ^ cereals (now worth ^18,210,496 out of a 
 total of ^^"36,054,410 imported) will be handicapped 
 by a tariff, and vast areas of British territory, now ly- 
 ing idle, will speedily be brought under cultivation. 
 With modern labour-saving machinery, cereals do not 
 need a large population for their production, and (un- 
 like oxen) they do not take long to grow. So exten- 
 sive and so geographically varied are our possessions, 
 that cereal crops could be garnered in and despatched 
 to English ports well-nigh all the year round ; and 
 this wide distribution of production would destroy the 
 opportunities attendant upon the American crops, to 
 
 1 Russia has been, of late years, England's second great source 
 of supply, our cereal imports for 1889-90 standing as follows : 
 
 Value in £ 
 
 Wheat 8,002,394 
 
 Barley 1,709,389 
 
 Oats - 3,865,488 
 
 Other kinds 1,142,489 
 
 ^^14,719,460 
 
 And although the Russian crops for 1891 have proved so 
 poor as to be insufficient for local consumption and to cause 
 wide-spread famine, this can only be regarded as an exceptional 
 national disaster, unlikely to recur except, possibly, at long in- 
 tervals. Under normal conditions, the proposals made with re- 
 spect to American cereals would apply equally to Russian.
 
 The Trade Economy of Federation. 137 
 
 limit the output or to play any of the thousand and 
 one tricks so well-known to Chicago comers and 
 Mark Law rings. Thus, within a very few years, 
 the British public would know what cheap bread 
 really means, under the competition of a world-wide 
 Empire. 
 
 How long would it take for the united efforts of the 
 Empire to supply England with the present quantity, 
 at present prices ? The quantity would be forth- 
 coming at two years' notice, at the outside. The 
 price would probably, at first, be slightly in excess of 
 present rates (the tables show that the difference has 
 never been very alarming). But against that, there 
 would be the certainty of a rapidly falling prospective 
 price : and an increase to the revenue from the duty 
 upon American wheat which, tax or no tax, VMist be 
 thrown upon the English market for what it will 
 fetch, or rot upon Dakota wheat fields. 
 
 Grain and Sugar. Grain, other than breadstuffs, 
 does not call for much comment, because each and 
 every variety can be profitably produced to any 
 required extent. What says the English farmer to 
 soil (the Canterbury Plains, New Zealand) which, 
 without an ounce of manure, averages 80 bushels of 
 oats to the acre ; which oats I have myself known to 
 be unsaleable at sixpence per bushel, within sight of 
 Lyttclton harbour ? Barley thrives equally well, but
 
 138 The Trade Economy of Federation. 
 
 is equally unprofitable. Rice we have already a 
 monopoly of in the East. I have seen samples of 
 hops (Tasmanian, New Zealand, and Victorian) 
 which Kent itself could not surpass, but so little are 
 they in demand that Australian brewers actually 
 import them ! 
 
 Sugar cannot so lightly be passed over. In this 
 industry, the reckless, bull-at-a-gate perversion of 
 intelligent Free Trade, to which we have given the 
 name of Cobdenism, has led England not only to 
 neglect her own possessions, but to permit one of her 
 own best enterprises — the sugar-refining trade — to be 
 practically crushed out of existence. How did this 
 come about ? Very simply. Continental nations 
 invented a sort of double-barrel Protection for sugar 
 by paying bounties upon exports of the refined 
 article. Against this monstrous handicap even Eng- 
 land protested — to the extent of appointing Bounties' 
 Commissions and proposing Bounties' Conferences. 
 But it is useless opposing words to brickbats. She 
 did nothing more ; and her refining industry perished. 
 There was no second economic reason why it should 
 so have perished. Foreigners have no special know- 
 ledge of, or skill in, refining which should entitle 
 them, even upon Free Trade principles, to monopoly 
 in the industry. They were simply bribed at both 
 ends, by Protective tariffs and by bounties, to an ex-
 
 The Trade Economy of Federation. 139 
 
 tent which closed the English factories. And here 
 are the results. 
 
 In 1889, England imported refined sugar from the 
 following countries to the amounts stated. 
 
 Germany- . . - ^^8,77 1,220 
 
 France - - - - 2,855,268 
 
 Holland - - - - 1,692,678 
 
 Belgium - - - . 1,077,180 
 
 ^^14,396,346 
 
 In the same year, England exported ^609,115 worth 
 of the same commodity ; and, most probably, even 
 this paltry quantity was not of English manufacture. 
 
 Now, nine-tenths of the known sugar-cane areas 
 are British possessions, of which I need only mention 
 the West Indies, Mauritius, Queensland, and New 
 South Wales, north of the Clarence River, The Dutch 
 have Java, and make full use of it. But where do 
 the other foreigners get their raw sugar from ? Some 
 they grow, from beet-root ; the rest they import from 
 British possessions, refine, and sell in English mar- 
 kets. Beet-root sugar is said to be of finer quality 
 than cane sugar, and foreigners are specially skilled 
 in beet culture. Perhaps it is ; perhaps they are. 
 But if beet be essential for the finer qualities, why not 
 grow it in the Colonies, under far more favourable
 
 140 The Trade Economy of Federation. 
 
 conditions of soil and climate than exist in Europe ? 
 For the commoner sugars, at all events, cane is, and 
 always will be, the staple. And why, in the name of 
 common sense, not place English refiners upon equal 
 terms (at least) with their foreign rivals, and revive 
 this important but extinct industry ? 
 
 Before we quit this monstrous "bounties'' ques- 
 tion, we may, parenthetically, note the almost equally 
 unfair system pursued by certain foreign Governments 
 with a view to undermining British shipping interests. 
 Within the past few years, France and Germany, 
 becoming alive to the growing importance of the 
 Australian. trade, have heavily subsidised the Messa- 
 geries Maritimes and the Nord-Deutscher Lloyd 
 Companies respectively, to run fleets of powerful 
 steamships in opposition to the English companies. 
 But for the subsidies, such competition would be im- 
 possible ; but, with the assistance of the bribe thus 
 given, the foreign companies contrive to keep down 
 English profits to a most unjust extent. The object 
 avowedly is to encourage French and German ship- 
 ping industries. The real object is to encourage, by 
 low freights, the exportation of Colonial raw material 
 to France and Germany in order that (as with sugar) 
 it may there be manufactured for the English mar- 
 ket. Thus, too, the exportation of Colonial wines is 
 growing with great rapidity. It nearly all comes to
 
 The Trade Economy of Federation. 141 
 
 England, but it travels via France and Germany, to 
 be flavoured up into claret, and hock, and cham- 
 pagne. 
 
 How, it may be asked, can the British Government 
 prevent foreign Governments from granting bounties 
 and subsidies, if they see fit to do so ? It cannot ; 
 it is not suggested that it could. But what is con- 
 tended is that, under Commercial Union tariffs, 
 foreign refineries and foreign steamers would find 
 their occupation gone, so far, at least, as crippling 
 British industries is concerned. And that is the only 
 point that in any way concerns us. 
 
 Fruits and Vegetables. The amount expended 
 upon these is, relatively, not very large, but still quite 
 large enough to merit attention. The vegetables 
 must be grown at home or (with the exception of 
 dried vegetables and, perhaps, potatoes) imported 
 duty free from the Continent. To this no Colony 
 would object in the case of foods, which, from their 
 perishable nature, cannot be Colonial grown. But 
 fruits they can supply, and will insist upon supplying, 
 under a tariff. With careful packing all the ordinary 
 fruits can be imported, from different places, so as to 
 be as plentiful here in spring as in autumn. One of 
 the very best and wholesomest fruits, which seems 
 now to be gaining in public favour, the banana, needs 
 no packing at all. Bunches of luscious " lady's
 
 142 The Trade Economy of Federation. 
 
 fingers," cut green in Queensland or Fiji, and hung 
 up anywhere on board ship, arrive in London in a 
 ripe condition. There is not the smallest danger of 
 the fruit supply running short. But there will be full 
 scope for English fruit-growers, especially of the 
 choicer and more perishable varieties, to embark ex- 
 tensively in this industry. 
 
 Such, then, is a brief analysis of England's food 
 supply, how, and whence, it could be maintained. 
 Our considerations appear to establish three facts of 
 the very utmost economic importance, which may be 
 thus shortly summarised : (i) The British posses- 
 sions have, even now, resources sufficiently great to 
 supply England's necessities in many important 
 branches, and could do so, at a profit, if favoured by 
 a tariff. (2) With sufficiently long notice to prepare, 
 they could make good such deficiencies as at present 
 exist. And, of course, the longer the notice, the 
 more complete would be the supplies. (3) Supplies, 
 so procured, would not necessarily, or even probably, 
 be notably higher in price than rates now current ; 
 and they would, owing to wide and keen competition, 
 tend to fall very much faster than they do now. 
 
 IX. Exchange considerations. 
 
 We must now resume the Trade profit and loss
 
 The Trade Economy of Federation. 143 
 
 account, which was postponed at the end of Section 
 IV. for later discussion. 
 
 It is clear that, if England transfers her food 
 custom from the outside nations to her own posses- 
 sions with, perhaps, a share to States in Alliance, 
 these must purchase commodities from her to the 
 value of their increased Trade, which, for food alone, 
 would, as we have seen, amount to ^"94,013,177. Or, 
 in other words, her proposed new customers would 
 have to increase their export-import trade to the 
 extent of iJ"i 88,026,354 to make a deal possible in the 
 matter of food. That they could supply the food 
 has been shown at some length ; that is, the export 
 part of the business offers no further obstacle. But 
 could they increase their imports correspondingly ? 
 In answering this question, it is proposed to disre- 
 gard possible nations in Alliance, for the moment, 
 altogether ; and, furthermore, to merge the food- 
 payment Colonial imports in the wider subject of 
 Colonial importing power generally. 
 
 The populations of the nine outside nations enu- 
 merated in Section III. amount to 270,000,000 and 
 their Trade with Great Britain to ;^402,454,057. If, 
 thereto, we add Austria-Hungary (which does a 
 paltry British Trade of ^^3,678,834, with a population 
 of 42,000,000) we obtain a total of 312,000,000 persons 
 and a Trade of ^406,132,891, being an average of
 
 144 The Trade Economy of Federation, 
 
 £i 5s. per head. Sup-posing that Great Britain loses 
 this enormous number of customers of European race, 
 with what is she to replace them ? Excluding the 
 population of the United Kingdom, the British Empire 
 contains 292,000,000 of persons, of whom 280,000,000 
 are Asiatics or coloured. These 292,000,000 do a 
 Trade of ;^43 2,000,000, equivalent to £1 9s. 6d. per 
 head, of which 13 shillings is with Great Britain. 
 Taken all round, therefore, each foreigner of European 
 race is, commercially, worth nearly two Dependency 
 subjects. True ; and were the average a consistent 
 one amongst all Dependencies, the outlook would be 
 black enough. But it is not. India, and India alone, 
 is responsible for the smallness of the quotient. With 
 273,000,000 of people she only does a total foreign 
 Trade of ;^ 172,000,000, not quite seven shillings per 
 head. Other Eastern dusky folk under our flag 
 number 4,200,000 and have a Trade of ;^54,ooo,ooo, 
 giving a respectable average of ;^I3, whilst the 
 11,000,000 of Colonials do a total Trade of 
 ;^ 1 9 1, 000,000, equal to ;^I7 6s. per head. And, once 
 more, this average is kept down by the lamentable 
 commercial backwardness of Canada and South 
 Africa, which average respectively ^8 5s. and 
 ^8 5s. 6d. per head, as compared with the Australa- 
 sian average of ^^29 9s. 6d., wherein New South 
 Wales leads with the brilliant return of £^i 3s., and
 
 The Trade Economy of Federation. 145 
 
 Tasmania "whips in " with i^22 4s. Finally, we may- 
 note that the Straits Settlements stand far ahead of 
 all, and, as there are but 3,483 Europeans in a popu- 
 lation of 568,000, it is evident that skin colour is no 
 bar to Trade. There are absolutely no custom dues 
 whatever in Singapore ; ideal Free Trade exists, 
 with a Trade result of ^102 per head of population ! 
 Of course, it is chiefly a receiving-forwarding Trade ; 
 but very handsome commissions must stick to the 
 fingers of the Singapore people for all that. 
 
 From these facts and figures it becomes plain that 
 the future trade of Great Britain and of the whole 
 Commercial Union must chiefly depend upon the 
 advances made by backward India and by the back- 
 ward Colonies. And here not only are the proba- 
 bilities overwhelmingly strong in favour of such 
 progress under the encouraging stimulus of a Com- 
 mercial Union, but latest reports are most hopeful. 
 Here is an extract from a review (published in the 
 "Asiatic Quarterly" for January, 1891) of Mr. J. E. 
 O'Connor's Report upon Indian Trade for 1890. 
 " Trade shows a steady increase, exceeding by 5^ per 
 cent, that of 1889. . . There is a growing demand for 
 European luxuries amongst the lower classes of even 
 out-of-the-way districts . . . Exports, which reached 
 the huge total of 105 crores of rupees, increased 
 nearly seven per cent. ; and a new industry has got
 
 146 The Trade Economy of Federation. 
 
 a start, which bids fair to compete with America and 
 Australia, and that is the manufacture of flour, which 
 has been established chiefly in Bombay. Altogether, 
 the report is very satisfactory . . ."^ In this con- 
 nection, we may pause to note the reason why the 
 averages, not alone of England's Indian, but even of 
 her European and American, customers are so low. 
 They have all extremely small total foreign Trade 
 averages (as will be seen by reference to appendix 
 note on Foreign Trade), which (in the case of Europe 
 and America) their policy tends, in its very nature, 
 to crush. They rely upon internal local commerce. 
 Nothing in the whole range of Trade Economy is so 
 indisputably proved as that " the freer the trade, the 
 greater the trade." Indian Trade policy is free 
 enough, the only imports taxed, besides liquors, being 
 opium, petroleum, and salt. Hence, as the condition 
 of her people gradually improves, and as their grow- 
 ing taste for foreign commodities increases, there is 
 nothing whatever to impede their commercial pro- 
 gress. She cannot be expected, as a result of the 
 Commercial Union, to spring at a bound to the level 
 of her Asiatic sister-dependencies, with their ^^13 per 
 
 ^ The reader is earnestly urged to keep himself periodically 
 informed as to Trade returns. As time wears on he will, it is 
 confidently asserted, find the moderate forecasts in this work 
 being gradually verified.
 
 The Trade Economy of Federation. 147 
 
 head. But it is impossible to doubt that, within a 
 few years, her Trade would reach a ^i average. 
 What her commerce must eventually become it 
 almost dazzles the imagination to contemplate. 
 
 It is not easy to understand why Canada and the 
 Cape Colonies are, commercially, so far behind their 
 Australian sisters ; nor has a brief residence both in 
 the Dominion and in South Africa afforded me 
 personally much light on the subject. It is, naturally, 
 extremely important to thoroughly appreciate the 
 causes, whatever they may be, with a view to their 
 speedy removal. Protection cannot be the sole ex- 
 planation, because the Australasian Colonies are, with 
 one exception, Protectionist also, and the Cape is 
 very lightly Protected. Distance from European 
 markets is enormously in their favour. Both are rich 
 in natural resources. Wherein lies the explanation ? 
 It is vain to consult Canadian and South African 
 authorities, since one finds therein little else save 
 references to " national prosperity " and " commercial 
 progress." En void la preuve. 
 
 Australia 
 Cape Colonies 
 Canada 
 
 Areainsq.-in, 
 
 3,171,978 
 295,000 
 
 3,470,257 
 
 Population. 
 
 4,200,000 
 2,900,000 
 5,000,000 
 
 Revenue. 
 
 25,500,000 
 4,500,000 
 7,550,000 
 
 Trade. 
 
 122,000,000 
 2z| ,000,000 
 43,000,000 
 
 The reader will at once see that both the Cape and
 
 148 The Trade Economy of Federation. 
 
 Canada are, alike in Revenue and Trade, in reality, 
 miserably deficient. (In nearly all British communi- 
 ties Revenue depends upon Trade ; and the curious 
 fact holds, generally, good that the former is one-fifth 
 or one-sixth of the latter.) Perhaps it is, broadly, 
 true to say that Canada has been commercially over- 
 shadowed and stunted by her proximity to the 
 United States ; and that the Cape has not yet re- 
 covered from the deadly blow inflicted upon her by 
 the Suez Canal. If this view be the correct one, then 
 emphatically both are more deserving of pity than of 
 blame. In the case of Canada, what very brilliant 
 results could come of intimate commercial relations 
 with a country which has itself but a beggarly Trade 
 average of £0^ 8s., especially when that country took 
 the cream of the English Trade ? Let it, therefore, 
 be placed to Canada's credit that, in spite of neglect, 
 and treaties, and overshadowing, she can show double 
 the American Trade average. And let her, more- 
 over, despite immediate commercial loss and confusion, 
 welcome the M'Kinley tariff as a blessing in disguise, 
 since it compels her to embark in newer and more 
 profitable channels, and is the strongest lever ever 
 forged to bring about a Britannic Commercial Union. 
 Her Trade, henceforth, must increase, as surely as a 
 wheel, when the brake is removed, will run down an 
 incline.
 
 The Trade Eco7iomy of Federation. 1 49 
 
 So, too, with the Cape, which has by this time 
 reaHsed that her destiny is something greater than to 
 be a mere calhng place for easlward-bound ships. 
 What say statistics ? Do they indicate any increase 
 of late years in Canadian and South African Trade ? 
 Fortunately, an eminent authority. Sir Rawson Raw- 
 son, has prepared tables which fully answer these 
 questions as regards the whole Empire, and more 
 especially so far as England's Trade is concerned. 
 
 Table showing Increase of British Trade. 
 
 Percentage propor- Percentage Increase 
 
 
 Amount. 
 
 tion 
 
 . 
 
 in I SSg compared 
 
 
 ^11 
 
 1 
 
 
 ^ 
 
 withaverage of 
 
 Trade of United . 
 
 Average of 
 
 1S89. 
 
 Average of 
 
 18S9. 
 
 1884-8. 
 
 Kingdom with — 
 
 1884-8. 
 
 
 i884-8. 
 
 
 
 
 £Millions. £Millions 
 
 
 
 
 British India and ) 
 StraitsSettlements f 
 
 7i'5 
 
 76-4 
 
 lo'g 
 
 10-3 
 
 6-8 
 
 
 
 
 
 
 British _ North ^ 
 
 19-3 
 
 21-6 
 
 3-0 
 
 3'o 
 
 11-7 
 
 America j 
 
 
 
 
 
 
 Australasia . . 
 
 5o"S 
 
 52-2 
 
 7'7 
 
 7-0 
 
 3"5 
 
 South Africa (Cape i 
 
 
 
 
 
 
 of Good Hope r 
 and Natal) j 
 
 lO'Q 
 
 i5'9 
 
 I '5 
 
 2"I 
 
 58-6 
 
 
 
 
 
 
 All other Colonies . . 
 
 i6-6 
 
 17-9 
 
 2'S 
 
 2-4 
 
 7 '4 
 
 Total 
 
 167-9 
 
 i84*Q 
 
 25'6 
 
 24-8 
 
 9'S 
 
 These results appear to set the question as to the 
 expansion of Colonial Trade definitely at rest. The 
 strides made by the Cape are truly astounding ; a 
 fifty-eight per cent, increase effected, as it were, at 
 a bound ! Such progress is quite unparalleled, and 
 very plainly proves the commercial vitality of the
 
 1 50 The Trade Economy of Federation. 
 
 Colony. Canada, with an increase of nearly 12 per 
 cent, speaks as to her prospects in no uncertain 
 tones. All the rest show up well, with the exception 
 of Australasia ; and the cause of her small increase 
 must assuredly lie in the fact that her Trade has for 
 the past ten years, nay, throughout, been already 
 phenomenally great for so small a population. It is 
 especially cheering to observe that these are all in- 
 creases in Trade with Great Britain ; of course, the 
 justification and very heart's blood of a Britannic 
 Commercial Union. How is it possible to doubt, in 
 the face of such recent evidence, and hampered as 
 Colonial Trade still is, that under a Union each of the 
 Colonies would speedily attain to an average at least 
 equal to that of the Australian group, or that the 
 average of the latter would rapidly soar towards three 
 figures ? And surely if ever solid premisses justified 
 an impending conclusion, then the following forecast 
 is warranted by existing facts. 
 
 British Trade at time of establislunent of the Britannic Com- 
 mercial Uniofi, i.e. Present Trade with S P^^ ^^^^' added for 
 increase between now and then. 
 
 Great Britain's Total Foreign and Colonial Trade ,^779, 481, 292 
 Total Trade cf Colonics and I ependencies 453i 19^)707 
 
 ;^i, 232,686,999
 
 The Trade Economy of Federation. 1 5 1 
 
 British Trade twelve months after Covimercial Union. 
 
 India and Straits Settlements _^56o,ooo,ooo 
 
 North American Colonies 98,000,000 
 
 Australasian Colonies 206,000,000 
 
 South African Colonies 64,000,000 
 
 Ail otiiers 40,000,000 
 
 ;^96S, 000,000 
 States in Alliance 224,000,000 
 
 ^1192,000,000 
 
 United Kingdom^ ,^714,000,000 
 
 Total British Trade f 968,000,000 
 
 1.714,000,000 
 
 ,{J'i,682,ooo,ooo 
 
 The attention of the reader is drawn to the facts 
 that not only are the above totals based upon very 
 carefully-considered premisses, but a lavish margin 
 remains for any possible shortcomings : the estimated 
 total British Trade, consequent upon the Union, is 
 five hundred and eight millions larger than it is at 
 present, and four hundred and fifty millions larger 
 than it could reasonably be expected to be upon 
 existing lines, two years hence — were there no such 
 disturbing influences ahead as increased foreign 
 tariffs and time-expiring treaties. It may be added 
 that it is far more probable that Great Britain's share 
 
 1 Allowing two-thirds of the Colonial and Dependency 
 Trade (at present England's share is three-sevenths) ; and one- 
 third of the Alliance Trade.
 
 1 5 2 The Trade Economy of Federation. 
 
 of the total has been understated than that the total 
 itself has been exaggerated. 
 
 X. Would the tendency of such a Commercial 
 Union be towards Protection or Free Trade ? 
 
 Once more, let us proceed cautiously and tenta- 
 tively. Now, although politics are beyond the scope 
 of the present work, it is impossible to ignore the fact 
 that Commercial Union will inevitably entail some 
 form of political confederation. That is to say, that 
 instead of each section of the Empire basing its Trade 
 policy upon the theory of eventual independent 
 national existence, the aspirations of all will be 
 abundantly satisfied by existing as responsible, legis- 
 lating units of a world-wide Britannic whole. Healthy 
 rivalry then will be just as there now is between 
 Yorkshire and Middlesex, or between Ontario and 
 Quebec ; but alienation of national sentiment there 
 will be none. And, hence, the greatest existing prop 
 to Protection amongst the Colonies will be with- 
 drawn so soon as the word " Colony " is erased from 
 our statute-books. The trading instinct is innate in 
 communities of British race, and chafes at the re- 
 straint which national expediency (or what has been 
 held to be national expediency) has placed upon 
 freedom of Trade. Remove the restraint, and race 
 will follow its instincts.
 
 The Trade Economy of Federation. 153 
 
 It may be stated, with almost the precision of a 
 mathematical formula, that the closer the bonds of 
 union are drawn between communities of the same 
 race, the greater will be the Trade between them, the 
 disturbing element being the distance separating 
 such communities. Or, mathemxatically, commerce 
 [between such communities] varies directly as Union 
 and inversely as distance, i.e. : 
 
 Commerce = n- ,.„.» 
 
 JJistance 
 
 Hence : 
 
 The closer the Union, the greater the Trade. 
 
 The greater the Trade, the more general the desire 
 for unrestricted or Free Trade. 
 
 As a corollary to this general law, it follows that 
 every effort made towards strengthening the bonds of 
 union, or diminishing distance (which, economically, 
 means more rapid and more extensive means of inter- 
 communication), tends directly towards increasing the 
 volume of commerce. Until Commercial Union 
 becomes an accomplished fact, railroads and steam- 
 ships must be the principal adjuncts to swelling 
 Board of Trade returns. The beneficial effects of the 
 Canadian Pacific Railway and of the promised fleet 
 of Canadian Liners have yet to make themselves felt.^ 
 
 ^ The recent record-time, nineteen days, made between Tokio 
 and London, via this very railway, and the fast mail boats in con- 
 nection therewith, is a brilliant illustration of this position.
 
 1 
 
 154 ^-^^^ Tirade Economy of Federation. 
 
 After a io^s! years of the Protective encouragement 
 afforded by the Commercial Union to British com- 
 munities against foreigners, such Colonial industries 
 as were built upon a sound productive basis could 
 gradually dispense with Protection within the Union. 
 This may seem to be at variance with our well- 
 established previous contention that Protection tends 
 to intensify and not to diminish. But it is not. The 
 uncompromising, headstrong, all-producing Protection 
 begotten of national expediency does tend to in- 
 tensify ; it is as insatiable as the daughters of the 
 horse-leech. It is, however, radically different from 
 the discriminating, economically sound Protection, 
 adopted in order to enable young and backward 
 States of a self-contained Empire to give their pro- 
 ductive powers a fair test. Let us take an example. 
 In the Illawarra district of New South Wales, at 
 Wollongong and Bulli, there are inexhaustible seams 
 of the finest steam-coal in the world — coal that never 
 " cakes," coal, that stokers say, " it is a treat to 
 handle." Within fifty miles of this coal there are 
 large deposits of iron ore. Naturally, attempts have 
 been made to start iron industries. But such in- 
 dustries require large capital for their inception, and 
 money is dear in the Colony. They require skilled 
 labour, which is scarce and dear also. Still might all 
 these difficulties be surmounted but for foreign com-
 
 The Trade Economy of Federation, 155 
 
 petition. It is simply hopeless for the Colonial iron- 
 master to attempt to undersell Germany and the 
 United States, to say nothing of England and Scot- 
 land. He appeals for Protection, but, as the policy of 
 New South Wales is Free Trade, he appeals in vain. 
 The iron rests undisturbed in the Blue Mountains : 
 which are celebrated for their scenery. There are 
 upwards of thirty rich, unworked coal-seams at 
 Wollongong, which town, however, enjoys its chief 
 reputation for its butter. Now, is there any valid 
 economic reason why an industry, so favoured by 
 natural conditions, should not be fostered during its 
 struggling infancy? None whatever. Adam Smith 
 himself would so have fostered it. Or is there any 
 reason why it should require continued Protection 
 after it once took firm root ? None. Then, why was 
 not an exception made in its favour ? Free Trade 
 permits no such exceptions, as Free Trade is, at 
 present, understood. Yet, in this particular, glaring 
 instance, the New South Wales Government Jias ven- 
 tured a little way, by accepting a few local contracts 
 for iron manufactures at an increase upon import 
 rates. 
 
 Examples might be multiplied ; but one suffices to 
 illustrate the distinction between the economically- 
 sound Protection of encouragement and the economi- 
 cally-rotten Protection of exclusion.
 
 156 The Trade Economy of Federation. 
 
 In intimate connection with the question as to the 
 duration of Protective tariffs is the subject of labour. 
 The Colonial working-man stands upon a very much 
 higher platform than his brother in the United 
 Kingdom, whom he regards with the utmost pity and 
 not a little contempt. He derives all his information 
 from an ultra-radical press which is never so happy 
 as when it can harp upon the " down-trodden condi- 
 tion of the British labouring classes," or the latest 
 " death from starvation in a London garret." In a 
 country of manhood-suffrage, he is master of the 
 situation, and he has very nearly found it out. He has 
 achieved a signal victory in the Eight Hours Labour 
 Limit Acts; and now he has plunged into a war 
 against capital, in which he has, so far, come off 
 second best. In his secret soul, he does not recognise 
 that capital has any rights whatever. He believes it 
 to be a dishonestly-worked pool, filled by the proceeds 
 of his labour, and out of which he never receives his 
 fair dividend. And so long as his economic education 
 is left in the hands of ignorant demagogues, who 
 fatten upon his credulity, he will continue so to fight 
 and so to believe. Of late years, British working- 
 men have been stimulated into following his example, 
 have striven to make their Trades Unions as far- 
 reaching as his, and have gone on strike with even 
 greater frequency. They are still worse advised than
 
 The Trade Economy of Federation. 157 
 
 the Colonial ; or, perhaps, it is fairer to say that their 
 political power is not sufficiently great to enable 
 them to take his preliminary measures. To fight 
 capital, even after it has been weakened by an Eight 
 Hours Act, is a desperate venture. To attempt to 
 fight it without such an Act is sheer insanity. The 
 market value of all labour is regulated by supply, 
 that is, by competition. Once the minimum daily 
 wage has been reached (the limit, below which labour 
 cannot subsist), further competition narrows itself down 
 to the number of hours of work/^r diem. If this be 
 limited by law to eight hours, capital at once loses a 
 principal source of cheap labour, and all further con- 
 test centres round the amount to be paid for eight 
 hours' daily work. This the Colonial had sense 
 enough to grasp ; but his British brethren have only 
 faint glimmerings of it, and it is clearly not the 
 policy of Messrs. Mann, Tillett, Burns, & Co., to open 
 their eyes. There is something almost pitiful in the 
 sight of a deputation of working-men waiting upon 
 the Nestor of British politics for his views upon the 
 Eight Hours' question. He had none ; it is, politically, 
 too dangerous to express views upon so unbending a 
 science as Social Economy. They were informed 
 that the subject demanded the most patient considera- 
 tion ; which, being interpreted, means, either that an 
 ex-Premier and Chancellor of the Exchequer is
 
 158 The Trade Economy of Federation. 
 
 avowedly ignorant of the very elements of Economy, 
 or, that he is waiting to see which side of the question 
 the political cat will jump. 
 
 The broad fact is that it is well-nigh impossible 
 for a modern politician who is, necessarily, a seeker 
 after place and a holder of candles to the Protean 
 devil of public opinion to be also an Economist, who 
 is a seeker after truth. 
 
 The capitalist denies the right of the Legislature to 
 place any time-restriction upon his employment of 
 labour. But this, as we know, is a mere beating the 
 air. There is no such element as abstract right or 
 wrong in Social Economy. Whatever is expedient 
 for the time being is right, whatever is inexpedient is 
 wrong. Trade is obviously expedient. It has been 
 shown that a Commercial Union is expedient. There- 
 fore every measure necessary to establish that Union, 
 upon the most expedient lines, is expedient also. 
 These " most expedient lines " tend, from our point 
 of view, towards an ultimate policy of Free Trade 
 throughout the Union. The only point, therefore, 
 which concerns us is to inquire whether or not an 
 Eight Hours Act would be such a measure. 
 
 Protective tariffs in the Colonies will subsist so long 
 as may be necessary to place naturally favoured 
 local industries upon a footing of being able to com- 
 pete successfully in localjmarkets. The most ex-
 
 The Ti'cide Economy of Federation. 159 
 
 pensive element in production is labour. So long as 
 British labour remains disproportionately cheap as 
 compared with Colonial labour, the tariffs must remain. 
 So soon as the price of British labour, superadded to 
 the cost of freight, balances the cost of Colonial labour, 
 there is no further necessity for tariffs. If workmen 
 in the Colonies are both better paid and work fewer 
 hours than in Great Britain, how can equilibrium 
 ever be restored ? It is impossible to regulate wages 
 by Act of Parliament. But it is quite possible to 
 regulate hours of work. Let, therefore, the Legislature 
 do what it can, and remove half the difficulty of 
 equalising the labour markets. The wages part will 
 right itself in time by emigration from overcrowded 
 to undermanned centres of industry. Meanwhile 
 capitalists would find more profitable employment in 
 seeking to disseminate amongst their workmen a more 
 intelligent appreciation of the meaning of distribu- 
 tion, than in goading these very men to insurrection, 
 and in offending the ears of Economists by continued 
 assertion of " rights " which are seen only by the light 
 of nature, and exist chiefly in their own imaginations. 
 They have their rights ; but employment of labour 
 for twelve or fifteen hours a-day is not one of them. 
 
 The reader will readily perceive how important an 
 influence this labour question will hereafter play in 
 shaping future Colonial Trade policy; and that what-
 
 i6o The Ti'ade Economy of Federation. 
 
 soever tends to bring the labour markets throughout 
 the Empire to, at least approximately, equal con- 
 ditions of work-time and means of subsistence, tends 
 also towards uniformity in tariffs, towards gradual 
 abolition of the latter as unnecessary, and, hence, 
 towards intercivil Free Trade. It is, therefore, dis- 
 tinctly expedient that the political cat should forth- 
 with jump for eight hours; and, if working-men be 
 wise, they will, instead of damaging themselves and 
 their cause by a succession of temper-begotten strikes, 
 devote all their energies towards securing an Eight 
 Hours Labour Act. It lies within their power to do 
 this by constitutional methods, which alone command 
 the approval and support of the nation at large. 
 
 We have said that wage equilibrium must be left to 
 work itself out by time and increased migration 
 facilities. We may go farther and point out that even 
 now the difference is not so overwhelmingly upon the 
 side of the Colonial as is here popularly supposed. 
 Let us seize the opportunity to. enliven our somewhat 
 heavy economic enquiries by a few pen-and-ink 
 sketches in illustration of this misconception. 
 
 Sheep-farming, as everybody knows, is a staple 
 Australian industry, and of course furnishes employ- 
 ment to a great many men at shearing-time. The 
 days of that hermit of the plains, the shepherd, have 
 been pretty well numbered by the modern system of
 
 The Trade EcoJtomy of Federation. i6r 
 
 wire-fencing. Still any one with a taste for a secluded 
 life may obtain a job in what is grimly termed the 
 "never, never" back country. But what seclusion! 
 A visit at intervals of three weeks or a month from a 
 boundary-rider bringing provisions of flour, sugar, tea, 
 and tobacco, with, perhaps, a mutilated newspaper 
 three months old. Salt meat in plenty, and fresh 
 mutton if he cares to kill and skin a sheep. Wages, 
 one pound a week, which he usually draws annually. 
 Not in cash; no cash is ever seen upon a station; but 
 in the form of a cheque. Then comes off the event 
 of the year, the long-looked-forward-to " spree." The 
 cheque is handed over to the proprietor of the nearest 
 "shanty" (bush public-house), and all-comers are 
 bidden to assist in " knocking it down." " Blue ruin " 
 (manufactured from new rum, tobacco, and bliicstone) 
 does the rest. A fit of delirium tremens, cured (or 
 killed) by a few days' incarceration in an out-house, 
 a farewell " nip with the boss," supplemented by a 
 bottle of ruin to put in his swag, and our shepherd 
 returns to his sheep for another year's solitude. 
 
 Shearers, if skilled hands, earn large wages. But 
 the work is terribly severe, with no protection from a 
 scorching sun except a galvanised iron roof Wages 
 used to be ten shillings per score of sheep, and, as a 
 good shearer can get through fourscore in a day, the 
 end of the season found him with a very comfortable
 
 1 62 The Trade Economy of Federation. 
 
 sum in hand. But the distances to be traversed from 
 station to station are often very great ; and, since the 
 introduction of the Wolseley shearing-machine, work 
 has become less plentiful and worse paid. Moreover, 
 at the best of times, shearing was only a temporary 
 employment. 
 
 Stockmen earn about ^30 a year, with rations and 
 a sleeping bunk. But to be a stockman, one must be 
 able to sit buck-jumping horses for twelve hours a 
 day under a hot sun, to cut out a wild bullock with a 
 stock whip, of which the last is five yards long, and 
 to do odd jobs of fencing and rough carpentering 
 which need some knowledge of tools. The life is 
 healthy enough and seems to have a fascination for 
 those engaged in it. The food is abundant, more 
 remarkable, indeed, for abundance than variety : 
 "damper" (dough baked in ashes), beef, tea, and 
 sugar, which may be supplemented by private pur- 
 chases of various tinned luxuries. Such articles as 
 vegetables, eggs, butter, etc., are seldom even heard of. 
 
 " Wanted for a station, married couple. Man to do 
 farm work. Wife to cook, wash, and be generally 
 useful. Wages, ^40." Such is an every-day adver- 
 tisement ; and, of course, speaks for itself 
 
 " Wanted a governess to teach and take entire 
 charge of seven children. Must have thorough 
 knowledge of music and French. German and
 
 The Trade Economy of Federation. 163 
 
 elementary Latin desirable. Salary, ;!^i8 a year." 
 This is equally common, and is incidentally set 
 down by way of caution to fair members of the 
 writer's own profession. 
 
 Miners are the best paid of all. Gold miners, 
 alike in Ballarat (Victoria) and in Charters Towers 
 (Queensland), average from ten to eleven shillings per 
 day of eight hours. Coal miners earn more, especi- 
 ally skilled men paid by results. Some, employed 
 in the BulH-Wollongong district, figure upon the fort- 
 nightly pay-sheets for as much as £\2 and even £\\. 
 Others, less skilled, or less industrious, receive but 
 £7 to £%. But the industry has never been a very 
 steady one. Employment is not alwa}'s to be had, 
 and subscriptions to the " Strike Fund " are heavy. 
 Again, the conditions of life are, to the last degree, 
 monotonous. No places of amusement to go to, ex- 
 cept an occasional circus or travelling theatrical show ; 
 a thirst-begetting climate, during a great portion of 
 the year, which causes the inevitable hotels to be 
 crowded places of resort ; the evil national custom 
 of " shouting " (standing treat) for a crowd, no matter 
 how numerous. All these circumstances conspire to 
 discount the value of the wages earned. It is a 
 common saying of new arrivals that " one pound in 
 the old country is better than two out here ; " and, 
 broadly, the remark is accurate enough.
 
 164 The Trade Economy of Federation. 
 
 In the large cities, life is very much the same as in 
 English centres. Wages are, all round, a little higher, 
 and the hours, of course, are far easier. The common 
 food necessaries are cheaper ; house rent and clothing 
 dearer. Upon the whole, the Colonial artisan has 
 probably two shillings over, upon Saturday night, to 
 every one his British kinsman can call his own. But 
 in all the luxuries and distractions of life, the English- 
 man has an enormous advantage. The " wonderful 
 penny " is rarely used in Australia ; its place is taken 
 by the threepenny piece. " Halves of four ale " and 
 " twos of rum hot " are unknown terms. Threepence 
 is the lowest tender in any Colonial bar, whilst higher 
 toned places draw the line at sixpence. Tobacco is 
 dearer, and so are all places of amusement, which 
 latter are, furthermore, naturally behind the English 
 standard, both in variety and quality. These may, to 
 some, appear trivial points, but to the British work- 
 man they represent the very salt of existence. Let 
 him be careful, therefore, not to confound the number 
 with the purchasing power of the shillings earned as 
 wages. Let him emigrate by all means, if he finds 
 things going badly with him at home; but let him 
 not start with exaggerated expectations of what 
 awaits him at the other side of the world. Lastly, it 
 cannot be too well or too widely known that the 
 immigrant most wanted and most desired is the aeri-
 
 The Trade Economy of Federation. 165 
 
 culturalist ; if married, so much the better. Favoured 
 by liberal Land Acts, he can select a homestead in 
 any one of the Colonies, where, with good soil 
 beneath his feet, and a blue sky overhead, it is en- 
 tirely his own fault if he does not prosper. And if 
 the Commercial Union should show signs of becom- 
 ing an accomplished fact, Colonists like him will more 
 than ever be needed to bring now idle soil into profit- 
 able production. 
 
 XI. Financial effects of a Commercial Union. 
 
 We have only to reflect upon the enormous amount 
 of British capital invested in the thousands of channels 
 known to the London money market to appreciate at 
 once the full importance of this section in our inquiry. 
 It is unnecessary that we should seek to bring the 
 amount down to exact, or even approximate, figures. 
 It is more to our present purpose to ask, what does 
 this capital represent ? How is it chiefly, at present, 
 invested ? How would such existing investments be 
 affected by what would be, practically, a revolution in 
 our present commercial policy ? 
 
 Well, of course, all capital is a saving up of the 
 results of past production. It may be hoarded ; in 
 which case it is simply dormant or temporarily un- 
 productive ; or it may be utilised ; in which case it is 
 active or reproductive. Very few persons actually
 
 1 66 The Trade Economy of Federation. 
 
 hoard. A very large number of persons regard 
 security as of infinitely more importance than profit. 
 A smaller number are bolder and endeavour to com- 
 bine good profit with good security. Whilst a smaller 
 number still are rash, and plunge headlong into mere 
 speculations, which must mean either considerable gain 
 or considerable, if not total, loss. British investments 
 may be broadly classified under two headings : 
 Government securities, British and foreign ; indus- 
 trial enterprises at home and abroad. In both classes 
 of investments, the expected rate of profit or interest 
 is based upon the real or supposed stability of the 
 securities selected. Thus, amongst Government 
 stocks, an investor with, say, ^loo might, upon, say, 
 the 14th January, 1891, have chosen, for example, 
 amongst the following : 
 
 British 2 J per cents. 
 Canadian 3 „ 
 New South Wales 3J per cents. 
 New Zealand 4 per cents. ... 
 French 3 „ 
 
 Chilian 4I ,, 
 
 Argentina 5 „ 
 
 Uruguay 6 „ 
 
 These rates exactly reflected the supposed stability 
 and solvency of the communities quoted, and, further- 
 more, indicated the credit or borrowing-power of 
 
 
 Rate c 
 
 jf Interest 
 
 Price 
 
 Yielded. 
 
 
 £ 
 
 S. D. 
 
 ••• 93l 
 
 
 
 13 5 
 
 ••• 93 
 
 3 
 
 4 6 
 
 ... I02J 
 
 3 
 
 8 5 
 
 ... 106 
 
 3 
 
 15 6 
 
 ... 97i 
 
 3 
 
 3 8 
 
 .•■ 93 
 
 4 
 
 16 9 
 
 ... 75 
 
 6 
 
 13 4 
 
 ... 56 
 
 10 
 
 14 3
 
 The Trade Economy of Fedei'ation. 167 
 
 these communities. And hence it is of the very- 
 utmost importance that national credit should stand 
 as hi^h as possible. Of course, this national credit is 
 a very ticklish thinj^, and is, in the case of a great 
 many communities, liable to extraordinary fluctua- 
 tions, and often enough upon little or no grounds. 
 Thus to a person familiar with the two Republics, it 
 is quite unintelligible why the credit of Argentina 
 should stand so much higher than that of its smaller 
 but comparatively far richer neighbour, Uruguay. 
 It may seem strange also that the credit of Canada, 
 which, as we have seen, is commercially and financi- 
 ally far behind New South Wales, should yet be 
 better than that of the sister Colony. But there is a 
 reason for this. The British Government has upon 
 several occasions guaranteed Canadian loans (a pro- 
 ceeding which other Colonies view rather jealously), 
 and this has imparted a value to Canadian credit 
 generally, which it would, otherwise, certainly not 
 enjoy. Moreover, the fact that the Canadian pro- 
 vinces are federated as a Dominion is viewed by 
 investors as an element of strength. Now, clearly, if 
 Federation upon so small a scale be thus favourably 
 regarded, in conjunction with the support of Great 
 Britain, Federation of the Empire, upon the far wider 
 lines foreshadowed by a Commercial Union, would 
 very materially strengthen the credit of all British
 
 1 68 The Trade Economy of Federation. 
 
 communities, including that of Great Britain herself. 
 The security offered to investors would be as ab- 
 solutely safe as can possibly be imagined ; and the 
 borrowing powers of the various sections of the 
 Empire would be very materially improved. It is 
 true that the credit of what we have termed outside 
 nations would be impaired by loss of their British 
 Trade, and that holders of foreign securities would 
 thereby suffer, but not to any disastrous extent, the 
 foreign Trade of these nations being, as we know, but 
 a small item in their national polity. Whilst, upon 
 the other hand, the credit of the numerous smaller 
 nations which would, almost to a certainty, join in 
 Commercial Alliance, would greatly improve by 
 being in touch with our Commercial Union ; and it is 
 especially these smaller nations, which have absorbed 
 an enormous amount of British capital both in loans 
 and in industrial enterprises, which need strengthen- 
 ing in the interests of their British creditors. The 
 reader will recollect how the Argentina crisis of 1890 
 brought about the fall of the great financial house of 
 Baring Brothers, and how very barely averted was a 
 wholesale crash in London in consequence. Besides, 
 such British investors as have a fancy for European 
 Government stocks must be perfectly well aware that 
 their securities are absolutely at the mercy of a great 
 war, which may burst forth at any moment. Those
 
 The Trade Economy of Federation. 169 
 
 who believe in Russian and French bonds, in the 
 teeth of the Triple AlHance, and with the results of 
 the coming struggle a sealed book to human fore- 
 sight, cannot, with any decency, cry out against the 
 comparatively trivial effects of a Britannic Commer- 
 cial Union upon their foreign interests. It is open to 
 them to sell out these interests and re-invest in better 
 paying and really far safer Colonial securities. 
 
 The same argument applies, with equal force, to 
 industrial enterprises. It is quite true that a very 
 large amount of British capital is invested, for ex- 
 ample, in the United States, which would be injuri- 
 ously affected by the proposed Union. It must, 
 therefore, be for the owners of this capital to use 
 their own judgment as to the likelihood of the Union 
 becoming a fact, and either withdraw their capital 
 from the United States, or leave it there, according 
 to their opinions. It is not proposed to spring the 
 Union as a surprise upon the world. It must, under 
 the most favourable circumstances, take a considerable 
 time to bring about — certainly quite long enough to 
 enable them to shift their eggs from foreign to British 
 baskets. They are not asked to do so from merely 
 patriotic motives which, of course, find no place in 
 hard, economic argument. They are only invited to 
 consider whether it will pay them best to encourage 
 British or foreign enterprises, should the proposals
 
 1 70 The Trade Economy of Federation. 
 
 outlined in this work show signs of assuming definite 
 shape. 
 
 XII. Foreign nations and the Britannic Commer- 
 cial Union. 
 
 It may be assumed, as a foregone conclusion, that 
 many persons will oppose the Union as a distinct 
 secession from what has been somewhat vaguely 
 termed the " comity of nations." So it most un- 
 questionably would be. But if we inquire what 
 "comity of nations" actually means, and into the 
 grounds of our proposed secession therefrom, the 
 objection will be found to have in it nothing of force 
 or weight. Politically, the " comity of nations " is an 
 elegant way of saying : " Plunder your neighbours if 
 you can, and be very careful lest they plunder you." 
 Commercially it means : " Buy as little as possible 
 from foreigners ; sell them all you possibly can." 
 Thus Prussia has, during the recollection of men still 
 middle-aged, raised herself, by a series of successful 
 wars and annexations of adjoining territories, from a 
 second-rate position to the chief place in a powerful 
 Germanic Confederation. Thus, too, Russia has ex- 
 tended, and threatens still further to extend, her 
 dominions at the expense of Turkey; whilst the in- 
 dependent existence of half-a-dozen small kingdoms 
 may, at any moment, be extinguished by a fresh war.
 
 The Trade EcGnoiuy of Federation, i 7 1 
 
 So far as Europe is concerned, Great Britain has no 
 interest in this international game of beggar-my- 
 neighbour, other than to add her weight towards the 
 maintenance of a balance of power amongst the 
 hostile communities, and to keep open the Trade 
 route to the east. She neither covets additional 
 territory in Europe, nor has she much reason to fear 
 a successful attack upon her own shores. Her chief 
 interests are bound up in her outlying dominions, and 
 in her Trade with these. Her commercial policy is 
 also at complete variance with that of other nations. 
 In short, she is only geographically an European 
 power at all. When, in addition to all this, we reflect 
 that other nations do their very utmost, by stringent 
 Protective tariffs, to paralyse international commer- 
 cial relations, it becomes evident that, in forming a 
 Union of her own peoples, she would merely be 
 building up and strengthening markets to replace 
 those which foreigners have closed to her. Their 
 persistent policy has left her no alternative. 
 
 England is the hub upon which revolves such Trade 
 as a heavily-protected world has still left possible. 
 The adoption by England of a new position, as the 
 centre of a Britannic Commercial Union, must neces- 
 sarily tend to confine Trade, in the widest meaning of 
 the word, within the boundaries of the British Empire, 
 and of the States in Alliance. And although foreign
 
 172 The Trade Economy of Federation. 
 
 nations have succeeded in reducing their international 
 Trade relations to very low averages per head of popu- 
 lation, it may safely be predicted that curtailment of 
 even this small amount will be seriously felt in foreign 
 commercial centres. Without the enterprise, the 
 energy, and the example of English business-houses 
 to stimulate it, European commerce will gradually be 
 exterminated by Protection. Evil days, too, will be 
 in store for New York, and Boston, and Chicago. 
 But these losses will be no fault or doing of ours. We 
 have our own salvation to work out. Let other 
 nations work out theirs. 
 
 The first symptom experienced by the outside 
 nations will be a great falling-off in receipts from 
 customs, consequent upon diminished imports. This 
 deficiency will have to be met by a corresponding 
 increase in direct taxation ; and it will severely tax the 
 ingenuity of ministers of finance to find out how the 
 screw may be applied with a minimum of popular 
 discontent. 
 
 Considerable numbers of operatives will be thrown 
 out of employment, consequent upon diminished ex- 
 ports. And of these, it is probable that a large 
 proportion, especially of the more skilled artisans* 
 will emigrate to British Colonies, since the United 
 States will be productively as much checked as 
 Europe. This apparently inevitable loss of popula-
 
 The Trade Economy of Federation. 173 
 
 tion will make the double burthen of meeting the 
 revenue and of filling the regiments all the harder 
 upon those who remain ; and popular discontent will 
 be redoubled. It will soon become apparent that 
 communities within our Union will be gaining exactly 
 in proportion as foreign nations will be losing ; and 
 outcries abroad will be redoubled. Foreign powers will 
 see the very cream of their populations abandoning 
 stagnation and conscription for progress and freedom. 
 They will see their revenues steadily decreasing, and 
 their recruiting-grounds as steadily becoming ex- 
 hausted. They will find the torrent of popular 
 clamour }'early becoming harder to dam up and re- 
 strain within bounds. And they will see in the future 
 nothing but continued aggravation of these evils. 
 
 God forbid that any of these reflections should be 
 imputed to any base gloating by anticipation over 
 coming foreign troubles. They are set down in no 
 malice, but in order to lead up to what it would seem 
 must be the final outcome. 
 
 The strain of maintaining millions of unproductive 
 troops is, even now, borne with the utmost difficulty, 
 and, solely, from a general conviction that they are 
 absolutely necessary as a safeguard to national exist- 
 ence. Philanthropists, appalled at the preparations 
 made for slaughter upon a scale hitherto unprece- 
 dented in the world's history, talk desperately about
 
 1/4 ^/^^ Trade Economy of Federation. 
 
 national disarmament. Disarmament ! while yet the 
 German holds Alsace, and the Turk Constantinople ? 
 Vain hope! So far as human foresight can anticipate 
 coming events, the European crash is merely a ques- 
 tion of time, of how long it may be possible for the 
 existing strain upon national resources to be endured. 
 So soon as any one of the great powers finds itself 
 unable to bear the prolonged suspense of armed pre- 
 paration, it must, in self-defence, precipitate matters ; 
 nor are signs wanting that, by at least two of them, 
 this stage has nearly been reached. Moreover, the 
 balance of power is so evenly adjusted that no nation, 
 or probable coalition of nations, can hope for an easy 
 victory. The Triple Alliance may, or may not, prove 
 staunch ; may, or may not, prove triumphant. It is 
 just as easy to suppose that it may fall to pieces, or 
 be crushed by a I'Vanco-Russian combination. But 
 whichever way the impending struggle may end, it 
 will inevitably leave victors and vanquished alike 
 utterly exhausted. That will be the moment for a 
 peace-loving, disinterested power to interpose with 
 benefit to mankind ; but in order to do so effectually, 
 tliat power must itself be strong enough to make its 
 voice respected. Great Britain, as she stands, is cer- 
 tainly not such a power ; it is even doubtful whether, 
 upon licr present lines of policy, she could escape 
 being lierself dragged into the war, and it is a very
 
 The Trade Economy of Federation. 175 
 
 open question as to how much of her Empire would 
 remain under her flag at the finish. But Great 
 Britain, as the leading State of a world-wide Con- 
 federation, would be such a power. And inasmuch 
 as the establishment of a Commercial Union is, so 
 far as may be judged from past and current events, 
 an essential preliminary to such a Confederation, it 
 follows that the Union, in addition to offering salva- 
 tion to British Trade, offers also the very best 
 prospects for the future of the world's peace. The 
 expediency of, indeed the necessity for, Protection in 
 the case of nations compelled to resort to vast arma- 
 ments has already been indicated in some detail. 
 And if it can be made possible for these armaments 
 to be dispensed with, the strongest barrier against 
 foreign Free Trade will be removed. Then, and not 
 till then, will the "comity of nations" become a 
 reality, and have an intelligible, well-defined si.;nifi- 
 cance in British ears. 
 
 XIII. Steps towards a Britannic Commercial 
 Union. 
 
 Evidently the first thing necessary is to thoroughly 
 arouse public opinion throughout the Empire as to 
 the necessity for such a Union. Once the impor- 
 tance of the question becomes generally recognised, 
 measures will soon follow. Colonial Chambers of
 
 1 76 The Trade Economy of Federation. 
 
 Commerce will naturally look to London for a lead, 
 and London is not likely to be backward in setting 
 it. Nothing so strongly furthers a genuine, healthy 
 movement of this sort, as the bringing together of 
 representative commercial men and politicians from 
 all parts of the Empire. These men give expression 
 to the views, desires, and requirements of the com- 
 munities which they represent ; and it becomes 
 possible to decide upon bases as nearly as possible in 
 accordance with the wishes of all. But not less is it 
 essential that these communities should themselves 
 rightly appreciate their own best interests, in order 
 that their delegates may set out with a clearly defined 
 mission. A few such Trade Congresses would result 
 in an agreement upon, at least, the broad outlines of 
 a Commercial Code, which could be subsequently per- 
 fected at leisure. 
 
 Nor is it to be supposed that the expediency of 
 holding such Trade Congresses has been overlooked 
 by the distinguished men who have made the future 
 welfare of our Empire their especial study. Indeed, 
 as will be seen from a brief epitome of the work al- 
 ready done, the idea of commercial reciprocity has 
 already taken fairly strong root, and needs but a 
 more pronounced support from the various sections 
 of the British race to grow into accomplished fact. 
 
 Upon the 1 2th of February (1891), the Earl of
 
 The Trade Economy of Federation, i 7 7 
 
 Dunraven moved the following resolution in the 
 House of Lords : 
 
 "That, in the opinion of this House, it is desir- 
 able that the Colonial Governments be invited to 
 send representatives to a Conference, to be held 
 in London, to consider the advancement of Trade 
 within Her Majesty's dominions, and the forma- 
 tion of a fund for certain purposes of Imperial 
 defence." 
 
 Lord Salisbury, in reply, stated that Her Majesty's 
 Government thought that " for the present the sum- 
 moning of a Conference was not expedient." And 
 the Premier based his objections upon the following 
 considerations : {n) The Colonics would need to de- 
 bate the entire question thoroughly before they could 
 entrust their delegates with any definite proposals ; 
 {It) the state of opinion in Great Britain made it im- 
 possible " for any statesman, whatever his opinion 
 may be, to propose the establishment of retaliatory 
 duties " ; {c) the articles primarily affected would be 
 grain, wool, and meat ; and (asked his lordship) 
 " What chance have you of inducing the people of 
 this country to accept legislation which would make 
 these essential articles of consumption susceptible of 
 such tariffs?" But he added: "Whenever such a 
 modification of opinion takes place, so that this idea 
 of discrimination of duties in favour of the Colonies
 
 178 The Trade Economy of Federation. 
 
 shall be a fiscal possibility, I, at all events, shall not 
 oppose the wish of my noble friend to have the mat- 
 ter thoroughly discussed between ourselves and the 
 Colonies." And, in the end, Lord Dunraven withdrew 
 his motion. 
 
 Now, the grain, wool, and meat difficulties have 
 been discussed at some length in this work, and do 
 not, upon examination, appear to be so insuperable 
 as Lord Salisbury appears to believe. But his lord- 
 ship is clearly right in insisting that public opinion 
 must first be educated before reciprocal tariff legisla- 
 tion can even be hinted at by an English statesman — 
 " whatever his opinion may be." 
 
 In the month of April, the inauguration of the 
 United Empire Trade League marked a long step 
 forward toward the goal of Britannic Commercial 
 Union, and the first manifesto issued by Colonel 
 Howard Vincent, C.B., M.P., honorary secretary to 
 the League, admirably epitomises the great question. 
 Writes the gallant Colonel in conclusion : 
 
 " To elicit the voice of the nation — of the Empire, of 
 the British race — on this great question ; to develop 
 the world-wide internal commerce, on mutually ad- 
 vantageous terms, of the British Empire, is the object 
 of the United Empire Trade League. It seeks your 
 support — it hopes for your active sympathy and co- 
 operation in whatever sphere you are, in whatever
 
 The Trade Economy of Federation. 179 
 
 portion of the realm of Britain and Greater Britain 
 you may be located." 
 
 On June 19th, a strong deputation of the United 
 Empire Trade League, including fifteen members of 
 Parliament, had an interview with Lord Salisbury. 
 The objects of the League were thus formulated : 
 
 (i) To free the Mother Country and the Empire 
 from the treaty engagements with Foreign Powers 
 which prevented the Colonies from giving any pre- 
 ference to British Trade ; and (2) to summon an 
 Imperial Conference to consider the most practicable 
 plan of bringing the various portions of the Empire 
 into closer commercial union. 
 
 After listening to the able arguments advanced in 
 support of these objects, Lord Salisbury replied at 
 some length and very much to the same effect as he 
 had replied to Lord Dunraven's resolution. His 
 lordship's concluding remarks ran as follows : 
 
 " The difficulties have been often stated, but I will 
 just refer to them again. If you give a preferential 
 treatment — that is, a better price — to your Colonics, 
 it must be a better price than that which, with un- 
 restricted competition, is obtaining now. A better 
 price to the producer means a more disagreeable 
 price to the consumer ; and what we have to know 
 before we can formulate any propositions, or before 
 we can invite our Colonies to any kind of federa-
 
 1 80 The Trade Economy of Federation. 
 
 tion, is how far the people of this country would 
 be disposed to support a policy of which, I imagine, 
 the most prominent features are preferential taxes 
 on corn, preferential taxes on meat, and pre- 
 ferential taxes on wool. Some people may say 
 you can have those preferential taxes without 
 any increase of price to the consumer. Here we 
 are going into the recesses of Economical Science, 
 into which I will not ask you to follow me, even if I 
 were competent to take you through them ; but I ask 
 you to give to your propositions that sharpness and 
 definiteness in order that these matters may be 
 thrashed out and argued out before the country. You 
 will never get your countrymen to consent to legisla- 
 tion of a vague or indefinite kind, especially on 
 matters which concern their dearest daily interests. 
 If they are to make a sacrifice, or if they are to de- 
 part from their previous policy in a manner which 
 you convince them involves no sacrifice, they will, at 
 all events, desire to know it in detail and to be thor- 
 oughly convinced of the soundness of the arguments 
 by which you have arrived at the convictions you are 
 urging upon them. I know that the ordinary view 
 of the duties of the Government is to devise for 
 itself the measures that it will bring forward, and to 
 bring them forward and let them take their chance. 
 However true that may be — and I have no doubt it
 
 The Trade Economy of Federation. 1 8 1 
 
 is in a great measure true with respect to the large 
 mass of legislation on secondary questions which 
 they have to propose — it is not true with respect to 
 an organic question which concerns and will control 
 the very existence of our Empire and the very 
 foundations of our Trade. On these matters public 
 opinion must be formed before any Government can 
 act. No Government can impose its own opinion 
 upon the people of this country in these matters. It 
 is the duty of those who feel themselves to be the 
 leaders of such a movement and the apostles of such 
 a doctrine to go forth and fight for it, and when they 
 have convinced the people of this country their 
 battle will be won." 
 
 These masterly words once more emphasise the 
 paramount necessity of educating public opinion — 
 even to the extent of leading it " into the recesses of 
 Economical Science." Now these recesses are, after 
 all, not so deeply hidden as to lie beyond the grasp 
 of the most ordinary intelligence, as it is hoped the 
 reader of these pages will concede. Finally, the 
 London Chamber of Commerce has resolved to con- 
 vene a Congress of Chambers of Commerce of the 
 Empire, to be held in June, 1892. 
 
 It cannot be expected that any definite scheme of 
 Commercial Union will then be agreed to by the 
 delegates, because it requires years, not months, to
 
 1 82 The Trade Economy of Federation. 
 
 form public opinion upon a question of such magni- 
 tude. Under our free British institutions, enjoyed 
 equally by the British throughout our vast Empire, 
 legislation cannot advance one inch in advance of 
 public opinion. We are legislatively a slow-moving 
 race ; nor does our history belie the wisdom of our 
 forefathers' extreme deliberation in the past. But it 
 must be borne in mind that events, in the political 
 and commercial world, shape themselves nowadays 
 with far greater rapidity than formerly, and that our 
 opinions must be formed so as to keep pace with 
 nineteenth century progress. We hold a vast heri- 
 tage in trust for our posterity, but we hold it with a 
 grasp which must be tightened, or, assuredly, bit, by 
 bit, it will slip away. And as a matter not merely of 
 probability, but of self-evident certainty, what so sure 
 of tightening that grasp as Commercial Union 
 amongst essentially commercial communities ? 
 
 THE END. 
 
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 I. Promotion of General Happiness. Prof. M. Macmillan. 
 
 " A reasoned account of the most advanced and most enlightened utilit8>1an doc 
 trine in a clear and readable form." — Scotsman. 
 
 9. England's Ideal, 4c. Edward Carfenter. 
 
 " The literary power is unmistakable, their freshness of style, their humeur, an* 
 their enthusiasm." — Pall Mall Gazette. 
 
 10. Socialism in England. Sidnet Webb, LL.B. 
 
 " The best general view of the subject from the modem Socialist aiA6."—Aihenaum. 
 
 11. Prince Bismarck and State Socialism. W. H. Dawson. 
 
 " A succinct, well-digested review of German social and economic legislation since 
 
 iS70."— Saturday Reviete. 
 
 19. Godwin's Political Justice (On Property). Edited by H. S. Salt. 
 
 " Shows Godwin at his best ; with an interesting and informing introduction."— 
 
 Olatgow Herald. 
 
 18. The Story of the French Revolution. E. Belfort Bvx 
 
 " A trustworthy outline." — Scotsman. 
 14. The Co-Operative Commonwealth. Laurence Gronlund 
 
 "An independent exposition of the Socialism of the Marx school."— Coatemporar^ 
 Review. 
 16. Essays and Addresses. Bernabd Bosanquet, M.A. (Oxon.). 
 
 " Ought to be la the hands of every student of the Nineteenth Century spirit."— 
 Mcho. 
 
 " No one can complain of not being able to nnderstand what Mr. Bosanquet 
 means."- Pa(i Mall Gazette. 
 
 16. Charity Organisation. C. S. Loch, Secretary to Charity Orgaiiisatioa 
 
 Society. 
 " A perfect little manual." — Athenaum. 
 " Deserves a wide circulation."— Sto(s//ion. 
 
 17. Thorean's Anti-Slavery and Reform Papers. Edited by H. S. Salt. 
 
 " An interesting collection of essays." — Literary World. 
 
 18. Self-Help a Hundred Years Ago. G. J. Holtoakb. 
 
 " V\ ill be studied with much oenefit by all who are interested in the amelioratioo 
 of the condition of the poor."— Horning Post 
 
 19. The New York State Reformatory at Elmlra. Alexander Winteil 
 
 With Preface by Havelock Ellis. 
 *' ▲ valuable contribution to the literature of penology."— .B^aci and White.
 
 SOCIAL SCIENCE SERIES— {Continued). 
 
 S'f. Common Sense about Women. T. W. Hiooinsom. 
 
 " An admirable collection of papers, advocating in the most li>ieral s|iirit the 
 emancipation of women." — Woman'i Herald. 
 •21. The Unearned Increment. W. H. Dawson. 
 
 "A concise but comprehensive volume." — Echo. 
 ■22. Our Destiny. Laurence Gbonlond. 
 
 " A very vigorous little book, dealing with the influence of Socialism on morali 
 and re;igion." — Daily Chronicle. 
 OS. The Working-Class Movement tn America. 
 
 Dr. Edwakd and E. Mabx Avelinq. 
 " Will give a good idea of the condition of the working classes in America, and of 
 the vrtiious organisations which they have formed."— Scots Leader. 
 ■24. Luxury. Prof. Emile de Lavelbyb. 
 
 "An eloquent plea on moral and economical grounds for simplicity of life." — 
 Academy. 
 ■25. The Land and the Labourers. Rev. C. W. Stdbbs, M.A. 
 
 "This admirable book should be circulated in every village in the country."— 
 Manchester Guardian. 
 36. The Evolution of Property. Paul LafaBOUB. 
 
 " Will prove interesting and profitable to all students of economic history."— 
 Scottman. 
 
 57. Crime and Its Causes. W. Douglas Mobbison. 
 
 " Can hardly fail to suggest to all readers several new and pregnant reflections on 
 the subject." — Anti-Jacobin. 
 98. Principles of State Interference. D. O. Bitchie, M.A. 
 
 " An interesting contribution to the controversy on the functions of the State." — 
 Glasgow Hcald. 
 39. German Socialism and F. Lassalle. W. H. Dawson. 
 
 " As a biographical history of German Socialistic movements during this century 
 it may be accepted as complete."— /?'-i<is;i H'ff i(;/. 
 !80. The Purse and the Conscience. H. M. Thompson, B.A. (Cantab.). 
 
 "Shows common sense and fairness in his arguments."— Scofsmaji. 
 )81. Origin of Property in Land. Fustel de Coulanues. Edited, with aa 
 Introductory Chapter on the English Manor, by Prof. W. J. Ashley, M.A. 
 " His views are clearly stated, md are worth reading."— i'aturday Reviem. 
 '82. The English Republic. W. J.Linton. Edited by Kinbton Parke s. 
 
 " Characterised by that vigorous intellectuality which has marked his long life of 
 literary and artistic activity."— Siajgoio Herald. 
 ^3. The Co-Operative Movement. Beatbice Pottbb. 
 
 "Without doubt the ablest and most philosophical analysis of the Cooperative 
 Movement which has yet been produced. '—Spf«i-fr. 
 i84. Neighbourhood Guilds. Dr. Stanton Coit. 
 
 " A most suggestive little book to anyone interested in the social question." — 
 Pall Mall Gazette. 
 s86. Modern Humanist!). J- M. Robertson. 
 
 " Mr. Robertson's style is excellent— nay, even brilliant— and his purely literary 
 criticisms bear the mark of much acumen." — Times. 
 «6. Outlooks from the New Standpoint. E. Belfobt Bax. 
 
 " Mr. Bax is a very acute and accomplished student of history and economics. 
 — Daily Chronicle. t-j-.. ji 
 
 J7 Distributing Co-Operatlve Societies. Dr. Luioi Pizzamiglio. tditea by 
 
 F. J. Snell. 
 " Dr. Pizzamiglio haa gathered together and grouped a wide array of facts and 
 statistics, and they speak for themselves."—Sp>aArfr. -, , -rrr tt 
 
 58. Collectivism and Socialism. By A. NActfUEi. Edited by W. Hbafobd. 
 
 " An admirable criticism by a well-known French nolitician of the New Socialism 
 of Marx and Lassalle."— Daiiy Chronicle.
 
 SOCIAL SCIENCE SERIES— (Continued). 
 
 39. Tho London Programma. SiSMKT Webb, LL.Bw 
 
 " Brimful o( excellent itleu."— Anti-Jacobin. 
 
 40. The Modern Slate. Paul Leroy Beaulibd. 
 
 "A most iiiteres'iiig book; well worth a place In the library of every social 
 inquirer."— A'. B. tumomist. 
 4L The Condition of Labour. Henry Geuuob. 
 
 " Written with striking ability, andsure to attract attention." — A>uica«ti< Chronicl*. 
 •42. The Revolutionary Spirit preceding the French Revolution. 
 
 Felix Kocquain. With a I'reface by ProfesBor Huxlet. 
 * The student of the French Revolution will find in it an excellent introduction to 
 the study of that catastrophe. —Scoiiman. 
 
 43 The Student's Marx. Edward Avelino, D.So. 
 
 "One of the most practically useful of any in the Series."— G/asyow Herald. 
 
 44 h Short History of Parliament. B. C. Skottowe, M.A. (Oxon.). 
 
 " Deals very carefulh ami completely with this aide of constitutional history."— 
 S}fCtalu>: 
 
 45. Poverty: Ub Genesis and Exodus. J. G. Godaro. 
 
 " He states the problems «ilh creat force and clearness "—.V. B. Econoh.ist. 
 
 46. The Trade Policy of Imperial Federation. Maurice H. Hervbt. 
 
 " An inierestihi; contribuiiun to tlie discussion ' — Puhhshfrs' Circular. 
 
 47. The Dawfn of Radicalism. J. Bowles Daly, LL.D. 
 
 '■ Forms an adniiiable picture of an epoch more pregnant, perhaps, with political 
 instruction than any other in the world's history."— /^di/!/ Tneyraph 
 
 48. The Destitute Alien in Great Britain. Arnold White; Montague Crackan- 
 
 THORPE, Q.C. ; W. A. M'Arthur, MP.; W. H. Wilkins, &o. 
 ■' Much valuable inTorniation concerning a burning question of the day." — Tim:t. 
 
 49. IHegitimacy and me Influence of Seasons on Conduct. 
 
 A^BiiRT Leffinqwell, M.D. 
 
 We have not often seen a work based on statistics which ii more continuouely 
 
 interesting."- Westimiibler Hemew. 
 
 £0. Commercial Crises of the Nineteenth Century. H. M. Hynd.m.\n. 
 
 "One of the best and most permaneutly useful volumes of the Series."— Literary 
 
 Opinion. 
 
 61. The State and Pensions In Old Age. J. A. Spender and Arthur Acland, M.P. 
 
 " A careful and cautious e.xaminatiou of the question. — 7'* ;ne(. 
 £2. The Fallacy of Saving. ,John M. EoBERTS0^. 
 
 " A plea for the reorganisation of our social and industrial tyttexn."— Speaker. 
 63. The Irish Peasant. Anon, 
 
 'A real contribution to the Irish Problem by a close, patient and dispassionate 
 investigator."- Dailii Chronicle. 
 64- The Effects of Machinery on Wages. Prof. J. S. Nicholson, D.Sc. 
 
 " Ably reasoned, clearly stated, impartially written."— Literary World. 
 
 56. The Social Horizon. Anon. 
 
 "A really admirable little book, bright, clear, and unconventional."— Z>at{y 
 Chronicle, 
 id. Socialism, Utopian and Sclentiflc. Fuepf.rick Enoblb. 
 
 " The body of the book is still fresh and striking." — Daily Chronicle. 
 
 57. Land Nationalisation. A. R. Wallace. 
 
 "The most instructive and convincing of the popular works on the subject."— 
 National Reformer. 
 
 58. The Ethic of Usury and Interest. Rev. W. Blissard. 
 
 'The w<irk is marked l)y penuine ability."— A'ortft British AffncuUuralut. 
 
 59. The Emancipation of Women. Adelb Cbepaz. 
 
 " By far the most cimipreheusive, luminous, and penetrathig work on this question 
 that I have yet met v/ith."— Extract from Mr. Gladstone's Preface. 
 
 60. The Eight Hours' Question. John M. Robbbtson. 
 
 "A very cogent and sustained argument on what is at present the unpopular 
 tide.' — Timei. 
 ■61. Drunkenness. Geoboe R. Wllson, M.Tl. 
 
 " Well written, carefully reasoned, free from cant, and full of sound sense."— 
 NatioTiai OOserver. 
 
 62. The New Reformation. Rambden Balmforth. 
 
 " A striking presentation of the nascent religion, how best to realize the personal 
 and social ide&\."—Weilyiinster Hcview. 
 63 The Agricultural Labourer. T. E. Kbbb«,». 
 
 " A short summary of his position, with appendices on wages, education, allo^ 
 ments, etc., etc." 
 
 61. Ferdinand Lassalle as a Social Reformer. £. Bernrtbim. 
 
 "A worthy addition to the Social fjcrence Seriet."— North Brituh Bconomitt
 
 SOCIAL SCIENCE SERlES-{Continued). 
 
 66. England's Foreign Trade In XlXth Century. A. L. Bowlbt. 
 
 " Full of valuable information, carefully compiled." — 7'tnv««. 
 
 66. Theory and Policy of Labour Protection. Dr. Schafple . 
 
 " An attempt to systematize a conservative programme of reform."— Jtf an. Guard. 
 
 67. History of Rochdale Pioneers. G. J. Holyoakb. 
 
 " Brought down from 1844 to the Rochdale Congress of 1892."— Co-Op. Netos. 
 
 68. Rights of Women. M. Ostraoobski, 
 
 "An admirable .storehouse of precedents, conveniently arranged."— I>aiij/ Chron. 
 
 69. Dwellings of the People. Locke Worthington. 
 
 "A valuable contribution to one of the most pressing proMems of the day." — 
 Daily Chronicle. 
 
 70. Hours, Wages, and Production. Dr. Bbentano- 
 
 " Characterised by all Professor Brentano's clearness of style." — Economic Revieio.. 
 
 71. Rise of Modern Democracy. Ca. Boroeaod. 
 
 " A very useful little volume, characterised by exact research."— /)ai/v Chronicle. 
 
 72. Land Systems of Australasia. Wm. Epps, 
 
 " Exceedingly valuable at the present time of depression and difficulty." — 
 Scots. Man. 
 
 73. The Tyranny of Socialism. Y 'es Guvot. Pref. by J. H. Levy. 
 
 " M. Guyot is smart, lively, trenchant, and interesting." — Daily Chronicle. 
 
 74. Population and the Social System. Dr. Nitb, 
 
 "A very valuable work of an Italian economist." — West. Het. 
 
 75. The Labour Question. T. G. SprEB»> 
 
 " Will be found extremely useful." — Times. 
 
 76. British Freewoman, C. C. Stopes.. 
 
 " The most complete study of the Women's .Suffrage qaeation." -Bngtish IVoin. Rev. 
 
 77. Suicide anb Insanity. Dr. J. K. Strahan, 
 
 " An interestesting monograph dealing exhaustively with the subject. ' — Tiirus. 
 
 78. A History of Tithes. Rev. H. W. Clarke 
 
 "May be recommended to all who desire an accurate ideaqf th-d subject.' —D. Chron. 
 
 79. Three Months in a Workshop. P. Gohre, with Pref. by Prof Ely. 
 
 " A vivid picture of the state of mind of German workmen."— A/anc^. Ouard. 
 
 80. Darwinism and Race Progress. Prof. J. B. Haycraft 
 
 "An interesting subject treated in an attractive fashion." — Glasgow Herald. 
 
 81. Local Taxation and Finance. Ct. H. Blunden . 
 
 82. Perils to British Trade. E. Bl'kois. 
 
 83. The Social Contract. J J. RuU?seau. Edited by H. J. Tozeb. 
 
 84. Labonr upon the Land. Edited by J. A. Hobson, M.A. 
 86. Moral Pathology. Arthur E. Giles, M.D., B.Sc. 
 
 86. Parasitism, Organic and Social. Massart and Vandervklob. 
 
 87. Allotments and Small Holdings. J. L. Greex. 
 
 88. Money and its Relations to Prices. L. L. Price- 
 
 89. Sober by Act of ParlianTant. P. A. Mackenzie. 
 
 90. Workers on their Industries. F. W. Galtox. 
 
 91. Revolution and Counter-Revolution. Xabl Makx. 
 92 Over-Production and Crises. K. Rodbebtus. 
 
 93. Local Government and State Aid. S. J. Chapman. 
 
 94. Village Communities in India. B. H. Baden-Powell, M.A., CLE. 
 
 95. Anglo-American Trade. S. J. Chapman. 
 
 96. A Plain Examination of Socialism. Gustave Simonson, M.A., M.D. 
 
 97. Commercial Federation & Colonial Trade Policy. J. D.widson, M. A., Phil.D. 
 
 98. Selections from Fourier. C. GroE and J. Franklin. 
 99 Public-House Reform. A. N. Gumming, 
 
 DOUBLE VOLUMES, 3s. 6cl. 
 
 1. Life of Robert Owen. Lloyd Jones. 
 
 2. The Impossibility of Social Democracy : a Second Part of " The Quintessence 
 
 of Socialism ". Dr. A. Scil^kklf.. 
 
 3. Condition of the Working Class in England in 1844. Frederick Engels. 
 
 4. The Principles of Social Economy. Yves Guyot. 
 
 5. Social Peace. G. von Schultze-Gaevernitz. 
 
 6. A Handbook of Socialism. W. D P. Bliss. 
 
 7. Socialism: its Growth and Outcome. W. Mokkis and E. B. Bax. 
 
 8. Economic Foundations of Society. A. Loria- 
 
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